IIPR Q1 2025 Profits Name Transcript

DATE

Thursday, Would possibly 8, 2025 at 12:00 p.m. ET

CALL PARTICIPANTS

• Government Chairman — Alan Gold
• President and Leader Government Officer — Paul Smithers
• Leader Funding Officer — Ben Regin
• Leader Monetary Officer — David Smith

TAKEAWAYS

• General Revenues — $71.7 million, reducing 6.5% sequentially from the former quarter, essentially because of tenant defaults.
• Adjusted Price range From Operations (AFFO) — $55.3 million, or $1.94 consistent with proportion, a decline of 13% sequentially from This autumn 2024, reflecting the similar headwinds impacting revenues.
• Liquidity — Exceeded $220 million at quarter-end, supporting long run funding and operational flexibility.
• Portfolio Transactions — 12 months-to-date, the corporate received a $7.8 million commercial facility in Maryland, offered a Michigan cultivation facility for $9 million, and signed two new rentals totaling 211,000 sq. ft.
• Inventory Repurchase and Capital Movements — Repurchased $20.1 million of commonplace inventory (371,538 stocks at a weighted reasonable worth of $54.09), retired $8.8 million of unsecured notes at a bargain, and issued $10.1 million of most well-liked fairness by way of Collection A stocks.
• Safety Deposits Implemented — $5.8 million in tenant hire from secured deposits all the way through the quarter, absolutely laborious deposits for PharmaCann, 4Front, and TILT.
• Web Debt and Leverage — Web-debt to EBITDA under 1x, debt-to-gross property at 11%, and debt provider protection ratio close to 17x, indicating a conservative stability sheet.
• Re-tenanting Growth — Effectively re-leased 205,000 sq. ft in Michigan previously leased to PharmaCann, furthering tenant refresh tasks.
• Prison and Receivership Movements — Default notices issued to Gold Flowers, TILT Holdings, PharmaCann, and 4Front Ventures, with follow-up felony lawsuits and lively pursuit of therapies together with evictions and receivership processes.
• Leasing Call for — Completed full-building rent with Berry Inexperienced in Michigan, reflecting endured call for for corporate property in choose markets.

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RISKS

• Quarterly revenues diminished 6.5%, and AFFO declined 13% sequentially, each essentially because of tenant cost defaults.
• Speaker Gold mentioned, “we issued default notices for non-paying tenants and are aggressively pursuing all felony therapies,” highlighting ongoing publicity to additional tenant credit score occasions.
• Alan Gold mentioned, “safety deposits have been exhausted” in the case of PharmaCann, 4Front, and TILT, indicating lowered long run hire coverage from those defaulted tenants.
• Speaker Smithers famous, “festival from the illicit marketplace, worth compression, marketplace adulthood and few new adult-use markets might proceed to weigh on investor sentiment and operator efficiency.”

SUMMARY

Control emphasised the strategic deployment of liquidity to pursue selective investments whilst actively managing tenant credit score possibility thru a complete refresh program. The corporate carried out inclinations and new rentals to recycle capital and maintain total occupancy ranges. Ongoing regulatory tendencies, together with the advent of the States 2.0 Act and state-level hashish legalization efforts, may just affect the running surroundings, however corporate management is tracking those adjustments intently with out adjusting its core technique. New capital marketplace actions, equivalent to most well-liked fairness issuance and commonplace proportion repurchases, have enhanced monetary flexibility however don’t mitigate near-term tenant possibility publicity.

• Speaker Regin defined, “just about 1 million sq. ft of general leasing task” has taken position since past due 2023, reflecting a large re-tenanting effort and larger operational complexity.
• 3 leased homes stay topic to pending hire graduation because of regulatory and licensing delays, which control described as “beautiful same old throughout markets and throughout industries.”
• Speaker Gold mentioned, “inside of a brief 18 to 36 month time period, the send will typically be righted,” expressing control’s expectation for portfolio stabilization, despite the fact that uncertainty stays.
• The corporate reported gathering $4.5 million in hire from defaulted tenants all the way through the quarter, except for the carried out safety deposits.

INDUSTRY GLOSSARY

• Receivership: A felony procedure through which an exterior occasion (receiver) is appointed to manage assets or industry operations, generally when a tenant defaults or insolvency happens.
• Re-tenanting: The method of changing current tenants, regularly because of defaults or strategic repositioning, to optimize occupancy and money flows in business actual property portfolios.
• Challenge-Important Actual Property: Amenities deemed crucial to the core operations of a tenant, regularly used to suggest long-term, high-utility property inside of specialised industries.
• MSA (Control Products and services Settlement): A contractual association the place a third-party manages operations all the way through a transitional duration, regularly used to verify compliance with regulatory or licensure constraints.

Complete Convention Name Transcript

Alan Gold: Thank you, Eli, and welcome everyone to our first quarter 2025 income name. Prior to we commence, I want to thank all of the IIP crew for his or her exhausting paintings and determination. They have got in reality been dedicated to protective the long run worth of our portfolio for our shareholders by way of bringing their particular wisdom and revel in to this difficult business. We imagine we’re uniquely located with our robust stability sheet and liquidity to regulate throughout the ongoing uncertainty of the wider macroeconomic surroundings and the continuing demanding situations within the regulated hashish marketplace. As for the quarter, we generated general revenues of $71.7 million, AFFO of $55.3 million and ended the duration with simply over $220 million of general liquidity.

We delivered those effects whilst navigating a turbulent marketplace surroundings and advancing the strategic initiative we introduced on our ultimate name to make stronger our tenant credit score profiles and optimize occupancy throughout our portfolio. The wider macroenvironment, specifically the continuing uncertainty round price lists has weighed on financial forecasts, inflation traits, shopper sentiment and industry making plans. By contrast backdrop, we proceed to accomplish, that specialize in optimizing occupancy of our portfolio, opportunistically recycling capital and executing on enlargement tasks on a disciplined selective foundation. 12 months-to-date, we’ve received a $7.8 million commercial facility in Maryland, offered a cultivation facility in Michigan for $9 million and carried out two new rentals totaling 211,000 sq. ft.

Now Ben will supply extra element on our making an investment, leasing and disposition task. As well as, we strategically undertook steps to make stronger our monetary basis and power long run shareholder worth. 12 months-to-date, we repurchased $20 million of our commonplace inventory at what we imagine are compelling valuations and retired just about $9 million of debt at a bargain. To additional strengthen our capital construction, we additionally issued $10 million of most well-liked fairness. Those movements underscore our disciplined solution to capital allocation and our dedication to maximizing returns for shareholders. Now David will supply extra element on our monetary effects and capital place in a while.

As we introduced in March, we’re proactively operating to refresh a portion of our tenant base to higher place our corporate for sustainable enlargement and monetary efficiency. As a part of this effort, we issued default notices for non-paying tenants and are aggressively pursuing all felony therapies to be had to strengthen the efficiency of our actual property portfolio. We’re inspired by way of our development to this point and imagine it displays our control crew’s talent to navigate advanced eventualities successfully with a focal point on protective shareholder worth. We stay assured within the energy of our industry and the alternatives that lie forward. We glance-forward to preserving you up to date on our endured development. With that, I will now flip the decision over to Paul.

Paul?

Paul Smithers: Thank you, Alan. As we famous ultimate quarter, we’re taking a strategic and competitive solution to changing our defaulted tenants. I would like to supply some further colour on our development with each and every tenant. In a while after sending out default notices in March, Gold Flowers filed for voluntary receivership within the State of California and introduced the suspension of buying and selling on CBOE Canada. Stone Blossom Capital has been appointed because the receiver of the corporate and we’re recently in discussions with Stone Blossom about their plan for our homes leased to Gold Flowers.

Additionally in March, we issued default notices to Tilt Holdings and following the supply of those notices, TILT made partial bills and pleasure in their April hire responsibilities for the 2 homes we rent to them. We’re operating in excellent religion to unravel remarkable condo and different monetary responsibilities below the rentals whilst TILT works to finish the deliberate divestiture in their plant touching companies. For PharmaCann and 4Front Ventures, we’ve issued default notices and are actively operating with native suggest to aggressively pursue our felony rights below the rentals, together with evictions.

Working out that each and every state is other, which affects the timing and complexity of improving those homes, we’re operating diligently throughout the procedure and we will supply updates as we development. At the regulatory entrance, the States 2.0 Act was once offered within the Area ultimate month with bipartisan co-sponsors. As a reminder, this act would make state felony hashish companies federally felony and would additionally do away with the punitive 280E tax, amongst different advantages. As well as, all the way through ultimate month’s affirmation listening to for Terence Cole, President Trump’s nominee to guide the DEA, Cole mentioned that reviewing the rescheduling of hashish could be amongst his height priorities if showed.

And on the state point, Pennsylvania, Florida and Minnesota are making vital strides of their adult-use hashish legalization tasks. Pennsylvania is exploring legalization of grownup use hashish with Governor Shapiro’s finances proposing legalization efficient July 1, 2025, with gross sales expected to start out by way of January 1, 2026. In Florida, the Sensible and Secure marketing campaign goals to position adult-use hashish again at the poll for the 2026 election after receiving 56% give a boost to in ultimate November’s election. In any case, Minnesota’s Place of job of Hashish Control improved its regulatory framework by way of publishing its ultimate regulations in April.

With those state-level drivers and endured robust shopper call for, BDSA forecasts U.S. hashish gross sales to develop by way of 7% to $33.5 billion in 2025 and tasks a compounded annual enlargement fee from 2024 to 2029 of seven.2%, attaining $44.4 billion by way of 2029. That mentioned, festival from the illicit marketplace, worth compression, marketplace adulthood and few new adult-use markets might proceed to weigh on investor sentiment and operator efficiency. Those marketplace prerequisites are a key motive force of our re-tenanting philosophy of that specialize in bringing best-in-class operators to our mission-critical actual property. I would love to now flip the decision over to Ben to talk about our funding, leasing and disposition task. Ben?

Ben Regin: Thank you, Paul. For my ready remarks, I would like to the touch on our portfolio tasks described by way of Alan. Leasing, selective funding task and opportunistic capital recycling. All through the primary quarter, we received a 22,000 square-foot commercial assets in Maryland and entered right into a long run rent with a personal Maryland operator increasing our footprint within the State to roughly 316,000 sq. ft. And in April, we closed on a $9 million disposition in Michigan for our assets in the past leased to Emerald Enlargement and carried out a PSA to promote any other assets in Palm Springs, California. Those 3 transactions illustrate our crew’s focal point on strategic investments and opportunistic capital recycling.

At the leasing aspect, over the primary 4 months of the yr, we’ve carried out two new rentals totaling 211,000 sq. ft, together with a complete constructing rent for our 205,000 sq. foot assets in Warren, Michigan with Berry Inexperienced, some of the greatest cultivators in Michigan with some of the top-selling manufacturers within the state. We’re inspired with the call for we’re seeing for our property throughout markets and the leasing development we’ve made this yr, whilst additionally proceeding to supply horny new funding alternatives, which we can proceed to pursue on an excessively selective disciplined foundation. With that, I will hand it over to David. David?

David Smith: Thanks, Ben. For the primary quarter, we generated general revenues of $71.7 million, a 6.5% lower from the fourth quarter of ultimate yr. The lower was once essentially pushed by way of the tenant defaults we in the past disclosed in March. The decline was once in part offset by way of larger revenues from homes we recently-acquired or re-tenanted, further investment and constructing enhancements that led to base hire will increase and contractual condo escalations. All through the quarter, we carried out $5.8 million of secured deposits for the cost of hire on homes leased to 4 tenants.

Adjusted budget from operations for the primary quarter was once $55.3 million or $1.94 consistent with proportion, a lower of 13% in comparison to the fourth quarter of 2024, pushed essentially by way of the similar components that drove the lower in earnings sequentially. Our stability sheet remained forged this quarter, supported by way of $2.6 billion in gross property with just about $2.2 billion of the ones property unencumbered. Our best debt is composed of $291 million in mounted fee unsecured bonds maturing in Would possibly 2026.

Moreover, we proceed to function with conservative credit score metrics highlighted by way of a net-debt to EBITDA of lower than one instances, debt-to-gross property ratio of eleven% and a debt provider protection ratio of just about 17 instances, which we imagine positions us smartly for long run worth advent. This quarter, we carried out on a number of strategic capital markets transactions to make stronger our monetary place. In February, we repurchased $8.8 million of the corporate’s unsecured notes at a bargain to par worth and year-to-date, the corporate issued simply over 406,000 stocks of our Collection A most well-liked inventory below our at-the-market fairness providing program for $10.1 million in gross proceeds.

As well as, with the inventory repurchase program we established in March, we be able to opportunistically repurchase stocks that we view as a transparent undervaluation of our inventory. For the reason that adoption of our inventory repurchase program, we’ve repurchased 371,538 stocks of commonplace inventory below this program for a complete value of $20.1 million at a weighted reasonable worth of $54.09 consistent with proportion. Our forged monetary place, characterised by way of robust liquidity and varied capital markets get admission to, positions us smartly to navigate the present difficult marketplace surroundings. With that, I will flip it again to Alan. Alan?

Alan Gold: Thank you, David. As I indicated in my opening feedback, I’m happy with what our crew completed this quarter and we’re assured sooner or later. As long-term homeowners of our corporate, thanks as all the time on your endured give a boost to. With that, I would love to open it as much as questions. Operator, may just you please open the decision up for questions?

Operator: [Operator Instructions] And your first query lately will come from Tom Catherwood with BTIG. Please cross forward.

Tom Catherwood: Thanks such a lot and excellent morning, everyone. Paul, need to contact on – you discussed operating with PharmaCann’s against a solution, however I guess the 205,000 sq. ft that you simply leased in Michigan in April is PharmaCann’s facility. Is that proper? And have you ever gotten keep an eye on of a few in their property already?

Paul Smithers: Sure. Hello, Tom. So sure, this is right kind. That is a PharmaCann facility, and we are in point of fact more or less happy with having the ability to re-tenant that facility as temporarily as we did and put into fine quality tenant. So we expect that’s the starting of a excellent procedure and we will cross down the street with the remainder of them as essential. As we discussed, we’re actively pursuing felony therapies. However on the identical time there may be different doable results, together with receiver ships. So we are best in point of fact few weeks into this procedure. And so we expect leasing that facility is a in point of fact excellent get started for us.

Tom Catherwood: Were given it. And simply constructing on that rent, you’ve gotten additionally finished more or less only a vital quantity of huge block re-leasing up to now 18 months. There is clearly that one’s, the PharmaCann’s, then there was once, I believe, 160,000 sq. feet-in Pittsburgh ultimate quarter. After which any other 200,000 sq. feet-in Michigan on the finish of 2023. So more or less two questions round that. First, how did those transactions come in combination? Did you in finding the tenants or did they in finding you? After which 2nd, is there the rest distinctive with those tenants with regards to both their technique or construction or control that makes them other from tenants you have been leasing to 4 or 5 years in the past?

Alan Gold: Let me ask Ben to reply to that one.

Ben Regin: Sure. Hello, Tom. Sure, I imply to reiterate, you might be proper, I imply, we are speaking just about 1 million sq. ft of general leasing task whilst you return to past due 2023 with our Michigan deal. The sourcing of the tenants is available in all alternative ways. We are 8 years in and feature numerous nice relationships and networking within the business. We are very assured within the crew that we have got in position to execute and supply those tenants. We are very assured in our plan for the portfolio. It is nice to peer that there are nonetheless in difficult markets, teams that may earn a living.

You in finding environment friendly operators which can be appearing smartly, even in Michigan and a Massachusetts and California, in states which can be seen as a little bit extra challenged. And I believe they view an amazing quantity of worth in our mission-critical actual property. And we have now been very inspired in point of fact around the portfolio, the call for we are seeing from those teams.

Alan Gold: And Tom, simply on following-up on that query, so numerous those tenants which can be suffering lately would possibly perhaps have a topic with their stability sheet and their monetary place, extra so than the true running industry. They are running – the running surroundings whilst difficult that there – it may be an excellent industry. However with the ancient stability sheet problems that a few of them have creates extra of a stability sheet factor. And I believe that is what we are finding and we’re being very curious about opting for tenants that be able to function rather well and prevail sooner or later.

Tom Catherwood: Were given it. Admire all the ones ideas. After which one ultimate one for me. Because you introduced the tenant refresh program on the finish of March, so much has modified so far as price lists and there may be been file in the market that numerous packaging for hashish operators comes from China. Roughly since that early-April time frame, have there been every other tenants that you are inquisitive about their operations or outlook going ahead and would possibly should be incorporated on this refresh program going ahead?

Alan Gold: Smartly, as we are tracking all of our tenants and we imagine that there are – there the macro-environment remains to be difficult and that there may well be long run problems. However at this time, we’re moderately assured that we have got our arms round our portfolio and our tenant base and assured that inside of a brief 18 to 36 month time period, the send will typically be righted.

Tom Catherwood: Understood. Admire the entire solutions. Thank you, everybody.

Alan Gold: Thank you, Tom.

Operator: And your subsequent query lately will come from Connor Mitchell with Piper Sandler. Please cross forward.

Connor Mitchell: Hello, excellent morning. Thank you for taking my query. First, I simply need to return to the distance that was once leased to Berry Inexperienced, the 205,000 sq. ft of the Michigan assets, in the past PharmaCann. I assume simply more or less following on to a couple of Tom’s wondering. What sort of makes this assets distinctive in that you simply guys have been ready to rent it so temporarily?

After which must we think any others which can be in a identical degree or do you assume that that is going to be a trail that would possibly stick with for one of the vital PharmaCann homes or one of the vital others that you simply discussed would possibly fall below the method of receivership and may well be a little bit bit longer as a substitute?

Ben Regin: Sure. Hello, Connor, that is Ben. I will be able to take that. I would not essentially say it is distinctive. I imply, I believe this follows a lovely robust monitor document that the crew has right here of re-tenanting those constructions in Michigan, like we have now mentioned earlier than. I believe we do be expecting that this will likely play out, as Alan discussed, over the following 18 to 36 months as we are bringing new tenants in. However once more, we have now been very inspired by way of the outreach that we have now gotten, the inbound pastime we have now observed in point of fact throughout those constructions in more than one other markets, the teams that we are chatting with that I believe have the operational experience and the monetary place that we might need in our portfolio.

And we really feel excellent that we have got the appropriate crew in position right here to execute on our plan for those constructions.

Connor Mitchell: K. I respect that. After which possibly if you might want to simply remind us how a lot of the hire or safety deposits have been won and recorded in earnings within the quarter for the tenants that defaulted on bills for you guys seen as a part of the cleansing procedure that we must more or less take into accounts in a modeling point of view stripping out going ahead?

Ben Regin: David, why do not you go-ahead and care for that. However I believe that is a in point of fact excellent level that safety deposits have been used for some condo source of revenue within the first quarter and would possibly not be to be had in the second one quarter and past.

Alan Gold: Sure. So Connor, on that, I believe as we disclosed in our press unlock, there was once $5.8 million of secured deposits carried out for the quarter for the ones defaulted tenants. It is very important be aware on the subject of PharmaCann, 4Front and TILT the ones safety deposits have been exhausted. So simply over – simply over $0.20 a proportion of affect from that get advantages.

Connor Mitchell: K. After which any rents as smartly, I believe for a few of these, you might obtain January bills, however no longer February or March?

Ben Regin: With regards to what we in fact accumulated?

Connor Mitchell: Sure. Simply desirous about a modeling point of view going ahead, what would possibly not be being won for a quarterly viewpoint and even per thirty days?

Ben Regin: Sure. We will cross into the element offline, but it surely was once more or less $4.5 million that we accumulated from the defaulted tenants all the way through the quarter.

Connor Mitchell: K. I respect that. After which possibly yet one more for me. You guys made point out within the unlock of 3 leased homes which can be nonetheless – you might be ready on hire graduation because of approvals that have not been received but. Simply questioning if you might want to give some colour on possibly the markets those are taking puts in? After which if this has more or less modified your funding thesis on those markets if the regulatory procedure, the licensing procedure is a little bit bit slower than expected and possibly tougher whilst you have been underwriting the purchase of the valuables?

Ben Regin: Sure. Hello, Connor, that is Ben. Sure. I don’t believe it adjustments our view at the markets. I believe that is beautiful same old throughout markets and throughout industries in point of fact. I imply, it does take a while for a brand new operator to get in there, make any enhancements they could need to make to the distance, in the end get, sign-off an approval and ultimate licensing. So I believe that is all more or less within the commonplace process what we might be expecting for those property.

Connor Mitchell: K. That is fascinated about me. Thanks.

Ben Regin: Thank you Connor

Operator: And your subsequent query lately will come from Invoice Kirk with ROTH Companions. Please cross forward.

Invoice Kirk: Hello, thanks. Just right afternoon, everybody. So I sought after to speak logistically possibly about just like the treatment the place you are taking ownership of a few of these homes. And I assume what I need to ask is, within the context of no longer being plant touching, how – when you are taking ownership of the valuables, how does that – I do not know, affect that list standing with the exchanges or what are you able to do with the valuables whilst you have been to take ownership that helps to keep you in compliance with what you wish to have to do?

Paul Smithers: Hello Invoice, It is Paul. So you already know, it really isn’t an issue for us up to now. And after we do take ownership, in fact, we, as a New York Inventory Change indexed corporate, we don’t hang the license. We don’t function the valuables. So what we have now achieved up to now to verify a clean transition is to make use of a MSA control provider settlement. So we put a third-party in there to facilitate the transition into a brand new tenant and facilitate the license switch. So we’ve a excellent procedure in-place to be sure that we do not go any strains with our department from no longer being a plant touching corporate.

Invoice Kirk: That is highest. That is all I had. Thanks.

Paul Smithers: K. Thank you, Invoice.

Operator: And your subsequent query lately will come from Aaron Gray with Alliance World Companions. Please cross forward.

Aaron Gray: Hello, excellent afternoon and thanks for the questions right here. So need to piggyback a little bit off one of the vital questions which were requested at the resolutions. I perceive you might be restricted in what you’ll be able to talk about as a result of it is nonetheless ongoing and there may be numerous places and takes. However curious with regards to timing of a solution for those lively amenities, is that getting into play? I do know numerous instances for the prevailing tenants, they need to stay ongoing operations with the brand new tenant doubtlessly coming in as smartly. They would love to have the whole lot up-to-date and ongoing as smartly.

So curious how that comes into play, particularly whilst you do have a crop with a certain quantity of lifestyles cycle there and you wish to have to be recent and going out to be offered for the most efficient sum of money go with the flow. So simply curious if that comes into play with regards to those negotiations and the way you are looking to return to resolutions right here. Thanks.

Paul Smithers: Sure, thank you, Aaron. That is Paul. So sure, you might be precisely proper that it’s a lot more fascinating to have a appearing facility with the crops in excellent form and rising and the entire infrastructure up and working to facilitate a excellent switch. In order that’s all the time the objective. However that being mentioned, if we are in a receivership state of affairs, it is a little more straightforward as a result of it is structured and we’ve the keep an eye on of the receiver to lend a hand facilitate the switch. But when we’re in any eviction state of affairs, we’re keen and ready to take over the valuables, put it into an MSA like I discussed and blank it out. However that is more or less a final hotel.

And even if we are in eviction when we take keep an eye on, you already know, we are generally already in negotiations with a substitute tenant. And so with the cooperation of the departing tenant, we will make that switch. In order I discussed, it is all the time fascinating to have the functioning facility in-place at the switch and that’s the reason our objective.

Aaron Gray: Actually respect that colour. That is useful. After which 2nd query for me, simply as we take into accounts doubtlessly go back once more at the offensive, I believe you mentioned about $220 million of liquidity to be had within the presentation. Simply given the present set of hashish, I do know that is still a focal point, however ultimate quarter, I imagine you discussed that you have broadened funding alternatives. So simply curious lately, to any extent further colour you’ll be able to supply on that? The place are you seeing doable alternatives to deploy a few of that liquidity? Thanks.

Alan Gold: Sure. So we’re proceeding to judge many alternatives. I believe that, that liquidity comes with a price of capital and we are extremely curious about ensuring that we’re taking a look at alternatives that can give us an accretive return-based on our value of capital. And sadly, the surroundings does have a number of distinctive alternatives. And optimistically within the subsequent quick 3 to 6 month time period, we will to announce some new investments. However along with that, we proceed to check and analyze distinctive alternatives throughout the hashish business and now have a pipeline related to that.

Aaron Gray: Admire the colour there. I will leap back-in the queue.

Alan Gold: Thank you, Aaron.

Operator: That concludes our question-and-answer consultation. I want to flip the convention again over to Alan Gold for any remaining remarks.

Alan Gold: Thanks. And firstly, I would love to thanks fascinated about becoming a member of us right here lately. And once more to thank the crew for his or her exhausting and nice work-in for – in this portfolio and stockholders for his or her endured give a boost to. With that, we will finish the decision. Thanks.

Operator: The convention has now concluded. Thanks for attending lately’s presentation. You might now disconnect.