CSP Inc. (NASDAQ:CSPI) Q4 2023 Earnings Call Transcript

Unidentified Analyst: Well, yes, I mean if I may be really honest and with all respect, you have done an excellent job, I think, with press releases up until today. And I think while we’re seeing the reaction in the stock right now is because you did a poor job of explaining the excitement that you have now on the call and the opportunity like the reseller contracts the going in — that this can go into the networks, all network endpoints also, the massive TAM. You did a poor job on the press release, capturing the excitement on AZT. So my question is, the number one is part of your job is execution and you’re doing a great job at that without question. But you also have a responsibility to shareholders in the fact that you’re a small company with a very small float, and nobody knows about this company, the story or this opportunity.

I like to say you’re at the Super Bowl and nobody knows that you’re playing. So what is your strategy to enhance shareholder value since with the poor press release today, the shareholders are suffering for what’s a massive opportunity. Like right now, the stock is at onetime sales plus cash, it’s profitable. It seems a dividend. It has a great balance sheet and it has a really massive opportunity in front of it. So how are you going to get the story and connect to Wall Street, this massive opportunity? Number one is I hope we’re going to hear about every contract, say, why don’t we hear about all these reseller contracts? And if you look in the news lately, you’ve got utilities of being attacked, water utilities, electric utilities, China attacks in the last 24 hours, there’s massive highlight on operational technology cybersecurity.

You have a unique radical product. Nobody knows about it, so shareholders will suffer until that connection is need. So I want to know what you’re going to do different in going forward to get this story connected to wall street for to enhance shareholder value because it’s a great story, but nobody knows about it?

Victor Dellovo: Yes. I think we talked about that this whole conversation, right? We’re doing events. I’m talking to partners. We’re talking to distribution lines where as I have said, the shareholders I think their expectations sometimes may be a little bit out of whack, off-line, where they want a dividend, they want it to be increased, they want us to have earnings per share, and they want us to self-fund a startup, right? So it’s at this stage of the game, we enhanced our marketing budget by 10x that we normally did. We hired salespeople that are industry leader salespeople that frankly, cost a lot, right? But we figured we’d get better quality. We’re able to get into the oil and gas, talk to some of these large manufacturers and companies oil gas companies directly that they had relationships in the past.

And yes, what we’re doing right now. So — and we’re using the largest resellers in the security space with those conversations. But as I mentioned, these companies get — their doors get knocked on constantly on small security companies, right? I think there’s over 6,000 small security companies out there wanting them to represent them. So, we have to go through a 100-page form that we have to fill out, why we’re different is the whole thing, and they don’t want to pick up a product that company is going to be out of business in a year or two because they’re not funded correctly. There’s a lot that goes into it. It’s not just about ringing the doorbell saying, would you want to buy some cookies. I’m here. So, there’s a lot that goes into that.

Unidentified Analyst: No, my question more was your communication with the Street in getting the story that’s execution. You’re doing a great job there. Like I’m talking about why did doing press releases that you got some good new resellers. We don’t know about that. You have 50

Victor Dellovo: Yes, but these are hot off the presses, right? We had a call immediately while these are — literally the ink’s still drying on some of these things. So you’ll see things rolling out, but we were having this press conference today, and I know a lot of this would be coming out today. And you’ll see a lot of things coming out in the next two or three, four weeks and some — hopefully some exciting news on some opportunities that are closing.

Unidentified Analyst: Okay. Yes. And I think that’s where taking on a strategic investor even with a big name with — and it sounds like you’re talking to those. I think that would be a great way as well to give you guys the name and the resources to rapidly expand this because you have such a low structure, you’re selling software, it’s not going to take a lot of sales like it would for another company to drop a lot of EPS on the bottom line. Last question, obviously, it’s a small equity structure. At some point in the future, would you consider a forward stock split funds can have the ability to buy more shares? And maybe it’s not whatever the right time is to think about something. Is that something that you consider?

Victor Dellovo: Yes. We’ve talked about that at the Board level at every meeting what our options are. So yes, we would consider everything, and that’s one of the things that we’ve talked about.

Unidentified Analyst: Right. Yes. Okay. We’re using a great job on the execution. And honestly, on the press release up until today, I think you did a poor job of getting the AZT opportunity in the press release today. But that’s not fatal because it’s — what’s more important is that the opportunity is there, and it’s super exciting. So I just hope the communication is going to be very clear and consistent. I think consistent communication is important. These small cap companies want to run — if you want to run it like a private company, nobody is going to know you’re at the Super Bowl. So great job on execution, and I hope we’re going to hear a lot more on AZT to really correct the lack of excitement in the press release today. But you corrected that in a lot of ways on the call, but we — now people have to get the story out, so Wall Street connects with it. So thank you very much.