Cryptologic Limited
1999 2nd Quarter Results Conference Call July 27, 1999 - 4:30 p.m. EDT
Chairperson: Andrew Rivkin, President, CEO & Director
Operators: Ladies and gentlemen, thank you for standing by. Welcome to the Cryptologic Limited 1999 Second
Quarter Results Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct
a question and answer session. At that time, if you have a question, you will need to press the "1"
followed by the "4" on your touch-tone phone. As a reminder, this conference is being recorded today,
July 27, 1999. I would now like to turn the conference over to Mr. Andrew Rivkin, President, Chief Executive
Officer and Director, Cryptologic Limited Please go ahead, sir.
Andrew Rivkin: Thanks very much. Good afternoon, everybody. I'd like to start off by thanking everybody for joining us at
CryptoLogic's conference call. I'm sure that everybody has received our latest press release outlining our
second quarter results. With me today is Mark Rivkin, Executive Price-President, Harvey Solursh, Chief
Financial Officer, Jenny Solursh, Senior Vice-President, and Marion Stenden, Director of Legal Affairs.
What I'd like to do is first give a brief review of our financial highlights from this quarter,
and then discuss some of our prospects for growth in future quarters, and then I'll turn the floor over
for questions.
Second quarter revenues were up 54% over the same period last year, totaling U.S. $8 million, which
was an increase of $2.8 million. All items that I'm going to be mentioning are in U.S. dollars. Net earnings
for the quarter totaled $4.9 million, which was an increase of $1.6 million, or 48% over the same period last
year. As a result, our earnings per share in the second quarter of 1999 were 57 cents U.S., compared to 39
cents per share, U.S., in the second quarter of 1998. Fully diluted earnings per share were 32 cents for the
second quarter, compared with 22 cents for the second quarter of 1998.
As well, cash flow from operations were U.S. $5.7 million, which compare with U.S. $4.1 million,
which was an increase of $1.6 million year-over-year. Fully diluted cash flow from operations, per share,
was U.S. 37 cents, compared with U.S. 27 cents in the second quarter of 1998.
I'm sure most of you are interested in our quarter-over-quarter results. Revenue from the second
quarter of 1999 was 3.4% lower than in the first quarter of 1999. This follows the same trend identified
in 1998 when second quarter results were 15.6% lower than the first quarter. We believe this trend is
attributed to seasonality, and it has also been noted in other segments of the Internet industry. As you
can see, the effect of seasonality in 1999 is much less than in 1998, I believe as a result of improved
marketing efforts during the summer months of 1999.
As you probably are aware, CryptoLogic remains the largest supplier of software to the Internet
gaming industry. Also, our wholly-owned subsidiary, IOLL, completed two new licensing agreements for its
gaming software this quarter, and looks forward to the launch of Version 4 of its leading gaming application
in the later part of 1999 or early 2000.
We are also pursuing opportunities in global markets including Australia, Asia and Europe, to promote
our state-of-the-art gaming software applications, for electronic commerce and Internet gaming. While our
gaming software is currently in English, Japanese and Spanish, we expect several new languages to become
available in the coming year, increasing our potential to expand into international markets.
CryptoLogic continues to make significant progress in strengthening its position in Internet transaction
processing and entertainment, and in improving our operations to manage strong growth of our proprietary
technologies and systems.
Our cash position is now approximately US$36 million, or approximately CDN$55 million. This will also
help to provide us with the resources to expand into other related areas of our business. Also, as you may know,
management anticipates a listing on the NASDAQ national market in the fall. At this time I would be pleased to
answer any questions that you might have. Question and Answer Session
Operator: Ladies and gentlemen, we will now begin the question and answer session. At that time,
if you have a question, please press the "1" followed by the "4" on your push-button
phone. You will hear a three-tone prompt acknowledging your request. If your question has been answered
and you wish to withdraw your polling request, you may do so by pressing the "1" followed by
the "3". If you are on a speakerphone, please pick up your handset before entering your request.
One moment, please, for your first question. Your first question is from Alan Hershoff, private investor.
Please proceed with your question.
Alan Hershoff: You announced a stock buy-back in May. I was wondering if you had commenced
that and how far you are into it, if you are into it?
Andrew Rivkin: Yeah, the company has purchased about 25,000, currently, and is continuing
with that stock buy-back.
Alan Hershoff: Thank-you.
Operator: Your next question is from Bernard Berr, private investor. Please go ahead with
your question.
Bernard Berr: Hello. I'd like just to get a feeling for, if you could tell us, how strong
do you perceive the barriers to entry in the field of Internet gambling software, and second, if you would
have information pertaining to what your market share position would be vis-à-vis Starnet Communications
in the gambling arena?
Andrew Rivkin: Let me just answer the first question, there. We continue to raise the bar
in terms of Internet gaming software and the quality of the software that's required to compete successfully
in this industry.
We've been, now, developing software in this area for over three years. We've invested significant
dollars in research and development to ensure that our software is the best that there is, and I think that our
reputation is for having the best technology. Right now, with our Generation 3 technology, we are the only company
who offers multi-player games along with chat and other channels to allow the user to, really, do what they want
when they're on-line, enjoy their experience a little more, come back more frequently. I think that generation of
our technology is, today, eight months ahead of our competition.
When we release Version 4 at the end of 1999 or early 2000, we'll have spent in the tens of
millions of dollars developing the technology. That technology really will have functionality that far surpasses
our existing Generation 3 software, which is today, again, as I've mentioned, eight months to a year ahead of our
competition. When we look at the marketplace, we see our competitors with Generation 2 technology, or, in many
cases, Generation 1 technology.
So, in our opinion, there are significant barriers to entry in the marketplace, to be able to produce
the software, to generate the client base, is not easy today. And it continues to get more and more difficult
as we continue to evolve the software.
Could you repeat the second question for me?
Bernard Berr: Yes, the second question referred to if you would know what your percentage of
market share, in terms of revenue, would be, vis-à-vis Starnet Communications and Internet gambling.
Andrew Rivkin: It's really very difficult to measure. We know what our revenues are. Starnet
has several business areas, and on their statements it's not broken down between what revenue comes from
Internet gaming and what revenue comes from their other business areas, so it's very difficult to make a
determination. What I can say is that, in terms of revenue from Internet gaming, we are significantly larger
than any other player in the industry. In 1998 we processed US$991 million worth of transactions, financial
transactions, and that really far surpasses any of the competition in the marketplace.
Bernard Berr: Okay, thanks.
Operator: Your next question is from Charles Coupal, QVGD Investors. Please go ahead with your
question.
Charles Coupal: Congratulations, gentlemen, on very good results. I just have a question,
really, in two parts. Number one, if you could perhaps put a little more detail on your assessment of your
research and development spending going forward on an annualized basis, and also if you could discuss the
various languages that you're going to be offering in your coming year. You mentioned that you have several
new languages in the hopper.
Andrew Rivkin: Yeah. Along with our Version 4 technology we've created a language component
that allows us to separate languages from the application, change them very, very quickly, have users add
languages on the fly.
As we mentioned, currently the software operates in English, Japanese and Spanish, and in the
very near future, with that Version 4 technology, we will have that software operating additionally in Chinese
and French, in Italian, in German, Portuguese.
So there will be a number of languages, and the time that it requires us to customize the software
and add languages and have users change languages while they're using the software will be dramatically reduced.
So, effectively, the software will be really international with the release of Version 4 technology.
Charles Coupal: And, as far as the burn-rate on your costs for the total research development effort,
how do you see that on an annualized basis, going forward?
Andrew Rivkin: Every year we continue to spend more and more on research and development.
Really not spend, but re-invest our revenue in our technology. The company has been, because of the applications
we've developed and the success we've had in software development in the past, the company has always been
profitable since we started commercial operations in November of 1996. So, really, the answer is that we'll
continue to reinvest a portion of revenues in research and development, and ensure that our technology is
market leading, as it has been over the last three years.
Actually, Harvey Solursh, our Chief Financial Officer, is working on some specific numbers
for you, so maybe I'll let him do that. I'll take the next question and I'll get back to that as the numbers
become available.
Charles Coupal: Okay. Good.
Operator: Your next question is from Roland Brown, private investor. Please go ahead with your
question.
Roland Brown: Hi. I don't know if you noticed the problem with Starnet today, but they were
allegedly slapped with a lawsuit from a Vancouver-based company, which I believe may also be a licensee of
yours. I wonder if you can comment on what that means for the industry and how CryptoLogic would respond in
the case of a sell-off in the industry?
Andrew Rivkin: That news is very recent and we just heard about that this morning, as well.
The licensee who is suing Starnet is a licensee of our. We believe that they have migrated some of their
brands from Starnet to CryptoLogic as a result of some difficulties that they have had with Starnet. What
those difficulties are I don't know. That's between them and Starnet. And that lawsuit, again, is between
them and Starnet as well, so I can't really comment on what's going on between them and Starnet as well.
In terms of what impact that will have on the industry, I really don't think that that
particular case will have an impact on the industry in general. That's one licensee and their supplier
that seem not to be happy with each other. That happens in every segment of every industry. Can we have
the next question?
Operator: Your next question is from Patty Tobin of Internet Gaming International. Please go
ahead with your question.
Patty Tobin: I had a couple of questions. One would be if you could provide any information on
the most recent licensees and any information about your revenue share formula, and the other would be to describe
some of the additional and unique features of Version 4.
Andrew Rivkin: Yeah, the two licensees are Ten Times Corporation out of Curaçao?, and
Casino Monte Carlo out of Curaçao. Those are the two most recent licensees. Their brands are Monte Carlo
Casino and Stadium Casino. Monte Carlo is up and Stadium Casino is also up, as well.
In terms of the new features in Version 4, it's a comprehensive offering. We will be releasing
a number of new games that go along with Version 4 games that you haven't seen in CryptoLogic technology before.
That includes lotteries, bingo, poker and other games which players play against each other, as opposed to playing
against the House, progressive jackpot games like the types of games you see in Las Vegas, like Quartermania where
jackpots build up over numbers of machines and numbers of casinos to get very, very large will be included.
In addition we'll be releasing tournament, horse racing and several non-casino games. In addition,
Version 4 technology includes new methods for depositing and withdrawing money from e-cash. One of those new methods
is ACH, which allows the user to deposit money into e-cash directly out of their chequing account, and have money
returned directly to their chequing account. And that component of the technology has been released as of very
recently.
In addition, we will streamline the user interface. The entire user interface download and upgrade
procedure is going to be changed in Version 4 technology, and it'll effectively be one click, where the user clicks
on one button and instantly gets into the application. So we're taking away several steps which exist in Version 3
technology.
As I mentioned before, Version 4 has multi-language support. We're adding channels, so today we
have news, we have stock quotes, we have sports tickers, we have information on your comp points, we have a
break-the-bank promotion, we have casino news, as well. We're introducing additional entertainment channels
with Version 4. There's an integrated tutorial, which will teach users how to play the games. In addition,
there's on-line tips. The way we're doing that is through avatars, so there will be actual computer
personalities which you can choose to be your dealer, let's say you want a funny dealer or you want
a dry dealer...
Andrew Rivkin: But there'll be avatars for both the dealers and for the players and the trainers,
as well. So, right now, within the environment, you can walk around in 360 degrees in 3-D. In the future you'll be
able to walk around in that environment, but there'll be people there as well.
In addition, we're releasing photo-realistic versions of our software, so casino versions with
actual live pictures, and also real audio streaming, so you'll be able to get live audio content that goes along
with the casino as well.
I believe I just answered two of the three questions. What was the third question?
Patty Tobin: It had to do with your revenue-sharing formula with your licensees.
Andrew Rivkin: That information is not public, actually. That's between IOLL and its licensees.
Patty Tobin: And how many licensees do you have, now?
Andrew Rivkin: Thirteen. So that's between our wholly-owned subsidiary and its customers.
Is it 14? Sorry, it's 14 licensees.
Patty Tobin: Okay. Thanks.
Operator: Your next question is from Jason Selch, Wanger Asset Management. Please go ahead
with your question.
Jason Selch: Hi. I was wondering whether you could break down, say, the six-month revenues
into license fees for ongoing licensees, or share of takes, software fees for the new licensees, and then
revenues that come from non-Internet gaming sources. Is there any of those revenues?
Andrew Rivkin: The majority of revenue - the overwhelming majority - came from ongoing
license fees. There was a small component earned in the second quarter, which related to one-time
customization fees. It was small, and effectively insignificant. In addition, there are advertising
revenues from our subsidiary, Gamesmania. That as well is insignificant when you compare that with
the total revenue of US$8 million that the company and all its subsidiaries earned on a consolidated
basis. Interest was $382,000, but I believe that that information is available in quarterly statements,
as well. So the overwhelming majority of revenue comes from on-going licensing fees.
Jason Selch: Okay. Thank-you.
Operator: Your next question is from Jerry Shulak of Simmons & Bishop. Please go ahead with
your question.
Jerry Shulak: Congratulations on a great quarter. What percentage of the revenue comes from
the United States?
Andrew Rivkin: It varies, depending on the month. It tends to fluctuate. But the revenue that
comes from U.S.-based players tends to fluctuate between 60% and 70%.
Jerry Shulak: In view of the low multiple that CryptoLogic shares are selling at, and the
tremendous cash position that we have, and all your innovations - which are incredible - have you been able
to generate any institutional interest?
Andrew Rivkin: Recently a block has traded. That block went to an institution. I think that
there's more institutional interest than we've ever had in the past. We're really engaged in a comprehensive
program of improving the company's profile to the marketplace. That includes listing on NASDAQ.
We've been talking to many of the large U.S. investment houses regarding picking up research
coverage on CryptoLogic when we become listed on NASDAQ, and in addition we are putting together a comprehensive
investor relations program - investor and public relations program - that will coincide with our NASDAQ listing.
So really, we're trying to address those issues.
I think the best market for technology companies, even gaming companies with an Internet
distribution model is in the U.S. market. They've got the best appetite for those kinds of public companies.
And we intend to support that listing in a number of different ways, and I think we'll be able to significantly
raise the profile of the company and improve the PE multiple as a result.
Jerry Shulak: Thank-you. What is the industry's feeling on the ruling today - I'd like to have
your comment - on the New York Court's ruling, today, which places the legal responsibility on the player as
relates to a violation of the New York State gaming laws as well as Federal laws?
Andrew Rivkin: I think that it's a bit early to comment on that. The ruling just came out today.
We're in the process of reviewing the judgement. In that particular case there were some ancillary issues that
may have had an impact on the judgement. I think one of them, that is important, relates to the fact that they
were selling unregistered securities in New York State, and that in itself is very significant. So until I take
a look at the judgement and the judgement's reviewed by our counsel, I don't know what kind of impact that's
really going to have. I want to be sure that we have a real good understanding of what, specifically, was said
by the Supreme Court before we make any decisions on that.
Jerry Shulak: Thank-you.
Operator: Your next question is from Anthony DeWorth of Caussa Capital Management. Please go
ahead with your question.
Anthony DeWorth: Gentlemen, as other have said, the company continues to do very well, and the
new software sound all very exciting and so on. I've got a couple of questions.
I'd like to hear your comments on the status of the Kyl legislation. It seems to me that because
the CryptoLogic stock is, in my opinion, extremely cheap vis-à-vis other Internet corporations and other
corporations in general - low PE, high cash reserve and so on - it seems obvious to me that the Kyl legislation,
or that situation, is putting a cap on the upside of the stock. So I'd like to hear your latest comments on that.
I wanted to know what the revenue was from U.S. gamblers, but the previous questioner answered that one.
I also would like to know if there's any back-up plan in place to process Visa transactions should
the Kyl Legislation come down and clamp down on U.S. processors of that.
And I would also like to know how growth plans are progressing in areas other than gaming,
if there are such initiatives, and I believe there are.
And I'd also like to know what is planned to occur with the exercise of the significant amount
of warrants that are outstanding.
Andrew Rivkin: I'll have to try answer one at a time. I might have to ask you to repeat a couple
of those questions, though.
I'll start off with a general update on the Kyl Bill. Right now, there are 25 countries with
laws in place to extend Internet gaming licenses. Those include Australia, Austria, Belgium, Finland, Germany,
Russia, Liechtenstein, South Africa, four territories in the UK, several other Caribbean jurisdictions, and that
list has been growing over time. The U.S. is the only territory or jurisdiction right now that has proposed
legislation, which would make Internet gaming illegal.
That bill failed to pass last year. The status of the bill today is it passed the judiciary
committee on June 18th, 1999. There is no timetable for a full Senate vote. There's no bill in the House, as
well. In order for a bill to be passed into law in the States it has to go through both the Senate and the
House and then be reconciled. The bill in the Senate may be required to be reviewed by the Indian Affairs
committee.
At this stage, the Casual Bettor Provision has been removed, so that would make the individual
not liable for actually making a bet, even if they were a U.S. citizen. So there's a number of steps that the
bill still has to go through in order for it to become passed into law.
Our information is that the House, if there were to be a bill proposed in the House, it seems
that it would be a modification to the Interstate Wire Act, which would be very different than the bill in the
Senate. And that would require reconciliation. So that would serve to further delay and confuse the process,
which has already been delayed significantly and is in addition pretty confused as it is.
We are negotiating with groups out of Australia, out of South Africa, out of Peru, the Philippines,
the UK. Some of those groups include major land-based casino operators. We believe that those strategic opportunities
will help to first of all to grow our company, and also help in the future should Kyl's legislation in the U.S. pass
in some form or other.
Again, jurisdictions like Australia and the UK are reputable jurisdictions and have been
forthright and said that they will accept wagers from citizens of their country or citizens of the U.S.,
whether or not they're breaking the law in the U.S. or not. Our international customer base continues to
grow, and I think with the addition of multiple new languages, our international customer base will grow
even further.
In terms of merchant credit card processing, we have international relationships in place.
We don't use them today, but we do have international relationships in place. And Visa International came
out with a release very recently which suggested that they are adding a code to their system to include
Internet gaming as a legitimate means of processing transactions through their financial network, and
that was recently through Visa International. So we're satisfied that things have been going in the
right direction with respect to the Kyl Bill and the way we're dealing with the potential legislation in the U.S.
Did I answer all your questions?
Anthony DeWorth: There were two other points. And that's... the answers to the previous ones,
that's fine, thank-you. One of the other questions I had related to development of revenue sources other than
gaming. Are there other activities, R&D type activities going on, being test-marketed or whatever? And the
second one, the last remaining question, was the issue of the large number of warrants outstanding. And while
I know we're quoting revenue and profit numbers here on a fully-diluted basis, what are plans - if any - to
exercise that large number of warrants and perhaps get it out of the way?
Andrew Rivkin: With our Version 3, and even more so with our Version 4 technology, we have
created the capability of earning additional revenues through our technology. That is something that we will
be focusing more on in Version 4. There will also be entertainment content provided in Version 4. Some of that
will be on a pay-as-you-play basis. So there are opportunities to generate revenue from advertising within our
existing mechanism. We also, today, generate revenue from Gamesmania and its advertising endeavors. And many of
those are cross promoted with our casino gaming products. In addition, there'll be other entertainment content
that can be charged for with the Version 4 technology.
Further, we have a subsidiary, which is developing electronic commerce applications. That
subsidiary is about to launch an application - in 1999 - which will generate revenue not related to casino
gaming.
And finally, with respect to the warrants, we're hoping, by the time NASDAQ comes around, to
have encouraged those warrants to be exercised.
Anthony DeWorth: Good. Thank-you very much.
Operator: Your next question is from Mike Wilson, a private investor. Please go ahead with
your question.
Mike Wilson: Yes, I was wondering if you expected to finalize an agreement with an Australian
land-based casino, this year?
Andrew Rivkin: I think that we're hopeful that we will, in 1999. We're actively pursuing
relationships with land-based casinos right now. I don't know whether we're going to be able to do one is
Australia or whether it will be some other jurisdiction in the world, but part of our program is to actively
seek out land-based operators. As soon as we do identify an operator and put a deal in place, we will be sure
to let you know. In terms of when, what timing that's going to have, or whether it does happen, I can't really
give you anything more definite than that.
Mike Wilson: Okay. Does Gamemania... do they have a deal with Star Media?
Andrew Rivkin: Star Media? In Brazil? Yes, they do.
Mike Wilson: Do you expect to make any gaming deals with Star Media, or will it just be Gamesmania?
Andrew Rivkin: No, Gamesmania has a relationship with Star Media that relates to the content
of Gamesmania site, so the answer is no.
Mike Wilson: Okay. Thank-you.
Operator: Ladies and gentlemen, as a reminder, if you have a question please press
the "1" followed the "4" at this time. You have a question from Peter Che of
Canaccord Capital. Please proceed with your question.
Peter Che: Hi. My question has to do with the current problem of Starnet and its former
licensee, who is now a licensee of CryptoLogic. Now, my understanding of the dispute is that the licensee
failed to remit royalties to Starnet, and as a result Starnet terminated their contract and sued for the
unpaid royalties. Now, considering that this new licensee of CryptoLogic is now with you, how do you ensure
that licensees - in particular this particular licensee - do remit royalties. Do you have joint accounts with
all your licensees, or are the licensees allowed to have separate accounts with the charge companies?
Andrew Rivkin: Again, I can't comment on what happened between Starnet and its licensee.
It's really an issue between that company and Starnet. With respect to CryptoLogic and its process of
collecting from its licensees, since CryptoLogic provides e-cash services to all its licensees, we're
not in any danger of having a licensee not remit any royalties to us. So I'm not concerned about that
issue with that specific licensee or any of our other licensees. First of all, this news is very recent,
so we haven't had an opportunity to talk to the licensee, and second of all, it's between them and another
company. Our agreements do not require, in many cases, our licensees to exclusively use CryptoLogic software.
Peter Che: Thank-you.
Operator: Your next question is from Doug Hawkins, a private investor. Please go ahead with
your question.
Doug Hawkins: This is Doug Hawkins from Canaccord Capital. I wondered if you could clarify
if you have already submitted an application to NASDAQ, or what the timing is for that, and when you expect
approval might be received?
Andrew Rivkin: We have not submitted the application yet. We are very close to completing
the application on our side. We expected to be through the process in the fall. At our last conference call,
we had been asked, in terms of timing. We suggested that we thought it would be six months, which really was
October in terms of a target time, and I think we're on schedule to meet those goals.
Doug Hawkins: Thank-you.
Operator: Your next question is from Paul Smith, a private Investor. Please go ahead with
your question.
Paul Smith: I was just wondering what is your dividend policy going to be, or is there one
established yet, and where the stock price has been around $18 for some while, it's kind of confusing why
that would be, based on your steady results, and you've been doing some promotions work. I just wondered
if you want to comment on those two things. Thank-you.
Andrew Rivkin: CryptoLogic is a growth company. We're fairly young, although not by Internet
standards. At this stage we intend to use our financial resources to strategically grow the business, so
there's really no plan for any type of dividend in the foreseeable future. That's just not what the
company's really about.
Paul Smith: Right.
Andrew Rivkin: And the second question, sorry?
Paul Smith: Based on... you've had really good results, and I was just wondering... you say
you're promoting the stock and whatnot...
Andrew Rivkin: Actually, what I said was that in the fall, in addition and simultaneous with
our NASDAQ listing, we will begin to much more actively promote the company's profile. I think that you make
a valid comment that the share price is at $18 and it's been there for a while. We're hoping that along with
our introduction to the U.S. marketplace that we can have an impact on that.
Paul Smith: Very good. Thanks very much.
Operator: Your next question is from Jason Keogh of MRS Security Services. Please go ahead
with your question.
Jason Keogh: Hi there. I'm Jason Keogh and I'm from MR Security Service, Inc. I've got four
specific questions. The first one is relating to the sports book that is supposedly coming out in Version 4.
First of all, I've heard that there are a couple of licensees currently using the sports book, and I was
wondering whether or not you could verify that.
Andrew Rivkin: There are, as it stands today, there are a couple of licensee who are using
the existing sports book. I believe - actually, I just looked myself, this morning - our new sports book
component, our Version 4 sports book component is now up and on at least one of our licensees, namely
InterCasino, and I believe our subsidiary, IOLL, is going to be marketing that application to our other
licensees in the near future, as well.
Jason Keogh: My second question is, you've brought out the fact that with Version 4 you're
going to have lotteries, poker, jackpot games, bingo, etc. Are you planning on creating all that software,
or are you going to be licensing it from other vendors?
Andrew Rivkin: That software that we're talking about is being developed in-house. One of our
strengths is software development, and I think that we will solve some of the issues with some of those games
like poker, and some of the difficulties in horse racing on-line, and be able to provide a product that's
developed by us that I think will be superior to what else is out there.
Jason Keogh: About, approximately, a year ago, you mentioned a stock split. Do you have any
plans on spitting the stock at this time? And also, do you know whether or not you would have to go for
shareholder approval? I don't know if it's expired or not.
Andrew Rivkin: We still have shareholder approval. At this stage we've been advised by,
again, our U.S. investment houses who are helping us through the whole introduction to the U.S. marketplace
that splitting the stock would not be a good idea. So there's no real plan to do that at this price. It's
still sitting there and it's valid and we have the ability to do it, but unless something were to happen
with respect to the share price, it's not being considered right this minute.
Jason Keogh: Okay. Can you tell me who your U.S. advisors are?
Andrew Rivkin: I can't at this time.
Jason Keogh: Okay. One more... it's actually a request, and the request is that... could you
make a press release when you have formally submitted the NASDAQ application? Would that be possible?
Andrew Rivkin: Yeah, I think so. We can do that. We tend to press release events that are material.
I'm going to have to ask around our management team to see whether they feel that that is a material event, but
certainly that's something that, if you were interest in, we could put you in touch with somebody who could let
you know when that happens.
Jason Keogh: Okay. All right. That's all. Thank-you very much.
Operator: Your next question is from Philip Chen, a private investor. Please go ahead with
your question.
Philip Chen: Hi. This question just related back to the NASDAQ thing again. I just wanted to
clarify... you mentioned that you were on target for the fall period. Is that for listing, or is that for when
you believe you'll submit the application? I'm just uncertain.
Andrew Rivkin: That's for a listing. Just so I don't confuse anybody, the company has not
yet filed. There's no guarantee that we will get listed. We have reviewed the material from NASDAQ, we do
qualify, but there is obviously a process that has to be gone through by the company. We will file in the
very short-term future, and we're hoping that we will be listed by the fall.
Philip Chen: Okay. From what I understand, though, it normally takes between 90 and 120 days,
and being, already August, is it fair to say that within the next couple weeks, could you answer that?
Andrew Rivkin: We've been advised by our counsel, who's responsible for that, that we're still
on schedule. Our intention is really to file in the short-term future, and I think that'll still be on target
for our listing in the fall.
Philip Chen: Okay. Thank-you very much.
Operator: As a reminder, ladies and gentlemen, if you have a question, please press
the "1-4". There are no questions at this time. I'll turn the conference back to you.
Andrew Rivkin: Thank-you. I'd like to thank everybody for joining us today. I hope to
hear from everybody again, at the third quarter conference call in the fall. Thanks very much.
Operator: Ladies and gentlemen, that does conclude your conference call for today. We thank
you for participating and ask that you please disconnect your lines.
End of the Conference Call
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