Robert Berman: There are two — yeah. This is a good question. So the best the best way I can answer you is by telling you, history. So, as an example, the State of Georgia has been a customer of ours through our acquisition of SDS since 1997. So, the contracts typically run five years, seven years, 10 years and it’s a very sticky business. And the DOT is very seldom change their service providers because they can’t afford to lose the service and the data. So they stick with what they have if it’s working. So these are usually very long-term contracts and it’s a very sticky business where they just continue to renew.
KC Ambrecht: That kind of leads me to my next question. Like when you think about other companies you’re familiar with that are like another record out there that’s kind of rolling out this national footprint.
Robert Berman: There is nobody that we know of…
KC Ambrecht: Competitor.
Robert Berman: No. There is nobody that we know of that’s putting IOT sensors roadside for the purposes of what we’re talking about doing here. And none specifically that have the service side of the business, which is what makes Rekor different. KC, look, if you think about new technology and dealing with government, right? So they have this technology that they’ve been using for 50 years, 60 years, 70 years. It could be an induction loop and piezos. It could be bending plates, a whole bunch of different things, right? So what has happened through the years is that, there are limited companies that actually can service the old stuff and deploy new technology if it existed. Well, up until recently, it hasn’t existed. So the service side of our business is what makes us unique, okay? And I say that, in the same way that when you think about Amazon, what are they…
KC Ambrecht: Okay.
Robert Berman: … a technology company or are they a real estate owner or are they — do they own an airline or they own — are they like UPS? So, this is a business where being able to service the customer roadside and then have the proprietary technology that goes along with that makes all the difference in the world, because you can service the legacy stuff while you’re rotating the legacy stuff out to new equipment, because they can’t have the legacy stuff go down while you’re replacing it, right? So I think, Rekor, in that way is very, very unique. It’s very unique. And I can’t think of another company like Rekor, right? Like, there are companies that sell equipment. There are companies that, maybe do construction or maintenance.
But I can’t think of any other company that has the proprietary tech that we have that also has, as David mentioned earlier, thousands of man hours of understanding the way all this works roadside and has it all under one roof and is able to deploy it and work and gain the trust of these agencies, okay, to be able to service them. So that’s what makes this so special and I think we shouldn’t lose sight of that. It’s very important.
KC Ambrecht: Okay. And then just two quick questions on the numbers. What jumped out to me was your comment that you plan on being break even in 4Q or 1Q. Is that — I’m looking at the analyst models here. Are we talking like adjusted EBITDA, because they have losses throughout next year?
Eyal Hen: I want to answer.
Robert Berman: Well, Eyal, answer that question.
David Desharnais: KC can you say again.
Eyal Hen: Can you ask again, please?
KC Ambrecht: Yeah. So you guys mentioned that you plan on being break even in 4Q or 1Q of going forward. Is that — how should we think about that? Is that like an adjusted EBITDA basis, because I’m looking at analyst…
Eyal Hen: Yeah.
KC Ambrecht: … models and you have losses.
Eyal Hen: Yeah.
KC Ambrecht: Have fallen throughout all of next year?
Eyal Hen: Yeah, KC. It’s on an adjusted EBITDA basis. Yes. Cash flow positive or breakeven.
KC Ambrecht: Okay.
Robert Berman: And this fourth quarter or first quarter next year?
KC Ambrecht: Okay.
Robert Berman: Yeah. And I think, again, KC, the challenge we have, which we’ve been working on for months, is how we fund these implementations, right? So that’s what we’ve been solving for and we think we have a solution for it. Again, no guarantees, but we feel pretty confident that we’ve got a solution for that. That is something that is replicatable and something that’s elastic that can grow with the company that solves that problem.
KC Ambrecht: Okay. Like some sort of funding mechanism that can flex with your growth.
Robert Berman: Yeah. Exactly. Something that’s a funding mechanism that is on terms that are favorable to a company like Rekor that can flex with our growth and give us the ability to do exactly what we’re talking about doing here.
KC Ambrecht: Okay. And then one last question, Robert, I know you guys don’t give guidance on a year out and it’s only third quarter. But can you just kind of help us think about how to think about the revenue profile for 2024 as these state contracts kind of come online and you have this new perhaps funding and maybe you tack on some acquisitions. Like, how do you think about what this company looks like this time next year in terms of revenues?
