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Executives

Lauren Stevens - IR

James Orsini - CEO and Director

Kurt Streams - CFO

Jerry Hug - EVP, Corporate Development

Analysts

John Nobile - Taglich Brothers

Bridie Barrett - Edison Investment Research

Chad Nelson - Thomson Horstmann & Bryant

Single Touch Systems Inc (OTCQB:SITO) Q3 2014 Earnings Conference Call August 12, 2014 4:30 PM ET

Operator

Greetings and welcome to the Single Touch Third Quarter Fiscal 2014 Financial Results Conference Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to Lauren Stevens, Investor Relations for Single Touch. Please go ahead.

Lauren Stevens

Thank you and good afternoon everyone. I'd like to welcome all of you to Single Touch's fiscal 2014 third quarter earnings conference call. With me today are Single Touch's President and CEO, James Orsini; the Company's CFO, Kurt Streams; and Jerry Hug, Executive Vice President of Corporate Development.

Before I turn the call over to James, I would like to remind our listeners that on this call, management's prepared remarks and responses to your questions may contain forward-looking statements within the meaning of the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherit uncertainties, risks and changes in circumstances that are different to predict and many of which are outside of our control.

Our actual results and financial conditions may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial conditions to differ materially from those indicated in the forward-looking statements include, among others, our reliance on brand owners and wireless carriers, the possible need for additional capital, as well as other risks identified in our filings with the SEC.

Any forward-looking statements made by us on this call are based solely on the information currently available to us and speaks only as of the date on which it is made. In addition, any projections as to the Company's future performance represent management's estimates as of today, August 12, 2014. We undertake no obligation to publicly update any forward-looking statement whether written or oral that may be made from time to time, whether as a result of new information, future developments or otherwise.

And now it's my pleasure to turn the call over to Single Touch Systems' President and CEO, James Orsini, who will give an overview of our business activities and developments in the fiscal 2014 third quarter. James will then turn the call over to CFO, Kurt Streams, for a detailed account of the Company's financial performance. Finally Executive Vice President of Corporate Development, Jerry Hug, will comment on acquisition of DoubleVision, and we will then open the call to questions from participants.

This afternoon, we issued a press release announcing our results and filed our 10-Q. So listeners, who may not have already done so, may wish to look at those documents as we provide a summary of the results on this call. And with that, I will turn the call over to James?

James Orsini

Thank you everyone for joining our call today. This is an exciting time for Single Touch and I'm eager to give you an update. There are three topics which I wish to address on the call today. First is an overview of the strong financial results for the quarter including the product revenues and updates, the second is the recent changes to the Company including a new Board member and our recent acquisition, and third an overview of the strategic plan as we drive Single Touch towards growing more established presence in corporate structure.

To start with, I'm pleased to report that this quarter the Company has posted double-digit revenue growth quarter over quarter and year-over-year. For the quarter, revenue was $2.14 million which is 18% above last quarter and 11% above the same quarter in the prior year. Nine month year-to-date revenue was up $1.2 million or 21% over the prior year.

Looking closer, wireless application revenue was up 5% over the prior quarter, 1% over the quarter in the prior year, at $1.95 million for the quarter; media placement revenue more than doubled over the prior quarter at $130,000; and finally, licensing and royalties revenue increased to $72,000 for the third quarter of 2014.

Revenue growth from our largest retail client was partially offset by our sports retail client pulling back on messaging. We're in the early stages of the FreshDirect relationship and we anticipate messaging volume to begin to grow late in quarter four. We are seeing continued traction and positive momentum in mobile marketing as the business continues to look for the best way to take advantage of the mobile messaging boom.

In a recent article, How Messaging Apps Are Changing the Way Businesses Connect With Consumers, the CMO of LivePerson contends that SMS is the business to consumer solution for retailers, advertisers and brands to have more meaningful engagements with their customers. He goes on to say, successful business will learn how to engage customers on their terms, the way they want, whenever and wherever they want.

We're seeing several new business proposals in our pipeline moving beyond our mere functional messaging solutions and into marketing, CRM, promotional and customer loyalty programs. We believe our 'Come here. Be there.' reminder messaging solution is that answer, and we recently signed another specialty retailer to this service and have begun the short code provisioning process with our carriers.

It is clear that mobile is driving the vast majority of digital growth, and as a result mobile advertising is growing over five times as fast as desktop advertising. Zenith Media projects mobile advertising will grow by 49% per year through 2016. Another data point is eMarketer which estimates that in 2014, the U.S. alone will buy over $17.7 billion worth of mobile ads.

A theme we discussed last quarter was diversifying our revenue mix beyond SMS and into programmatic media buys from our FollowMe product. I'm happy to report that FollowMe is exceeding expectations in the number of impressions delivered and the click-through rates that are consistently above industry standards. These results are driven by six new clients added this quarter and repeat campaigns from clients like [NYRA] (ph) and GAF.

Our FollowMe mobile advertising solution has grown nicely. This quarter's revenue increased $130,000 from $60,000 reported last quarter. We ran nine campaigns for six different clients in the quarter. As we look forward, we expect FollowMe to continue growing for two reasons; one, our bolstered direct sales force; and two, the overall growth of the market and the client demands in this digital mobile advertising space.

We are also very pleased to report that the licensing and royalty revenue for the quarter was $72,000. You may recall that it was our goal to monetize our streaming media and dynamic ad insertion patents and we believe we continue to execute on this objective. Last quarter we discussed the three year licensing deal with a major broadcaster we announced in April of 2014.

Our revenue is $375,000 per year for not less than three years. We've received our first cash payment as well this quarter, and will be recording approximately $31,000 per month for not less than the next three years on this transaction. This transaction was executed via VideoStar LLC, our joint venture with personalized media communications, which pools some of our patented assets with a number of PMCs.

Now on to some of the exciting developments we've recently announced. I'm sure you all saw that we have recruited a highly experienced Board member, Betsy Bernard. She has a depth of experience in that industry and having been two time divisional president of AT&T, but what I find most interesting is her track record of involvement in developing smaller companies that grow into substantial compelling businesses greatly enhancing shareholder value in the process. I welcome Betsy to the Board as our lead director and look forward to working with her as we drive Single Touch success.

We announced in late July that we had acquired our technology partner, DoubleVision Networks. Jerry will discuss this transaction in more detail later in the call, but DoubleVision is a location-based ad buying and serving platform and is the technology behind our fast-growing FollowMe product offering. The acquisition is accretive and we expect that it will help accelerate revenue in the future. We are pleased to bring this technology under Single Touch's ownership. Further, in a step towards achieving an important goal for 2014, we are also retaining their experienced sales force. As we illustrated in our prior calls, we look to hire seasoned sales and business development talent.

This quarter I'm happy to report that we brought on another two direct sales members in addition to the two reported last quarter, and now our combined direct sales team numbers seven, and we expect their productivity to increase and continue to accelerate growth. The new business pipeline remains strong, we're happy with the new relationships in sports and gaming and luxury retail, beverage and grocery retail we signed on this quarter.

Moving on to the strategic direction of the Company, we hope that we've made it clear that Single Touch is on a mission to drive growth and make the Company a significant player in the mobile media world. We have strengthened our Board, increased our direct sales force and brought more technology in-house. Our next step is to make substantial changes in the exchange in which the stock trades. We issued a shareholder proxy seeking approval of a reverse stock split at the Board's direction. This is a step towards our eligibility to list on the National Exchange. Final vote tabulations are overwhelmingly favorable with 95% of shareholders approving and we believe we are executing on another goal that will further enhance the value of our shareholders.

We remain excited about the future of the mobile media space and the role that Single Touch can play in this ecosystem for our existing and new clients. We are encouraged by the continued evaluation of our patent portfolio and look to have more success on both fronts in the future, and we are confident that we have positioned Single Touch to capture the opportunities in the mobile marketing and advertising space.

I would now like to turn the call over to Kurt to take you through the financial highlights of the quarter.

Kurt Streams

Thank you, James. As James highlighted, we increased revenue by 11% to $2.1 million for the quarter as compared to $1.9 million for the fiscal third quarter of 2013. The fiscal third quarter of 2014 includes $131,500 in media placement revenue, a revenue stream that we launched in December 2013. Media placement revenue is driven by our sales of mobile advertising campaigns that feature banner ads on mobile devices. Our revenue is based on the same key media metrics as Internet advertising, which are the number of audience impressions and the CPM price to reach that audience.

For Single Touch, our FollowMe product enabled advertisers to reach highly targeted audiences at CPM prices that are significantly below CPM prices for print and Internet advertising. Looking at our quarter sequentially, we doubled media placement revenue in fiscal third quarter as compared to our fiscal second quarter. Hiring experienced mobile marketing salespeople and acquiring DoubleVision has positioned the Company to further accelerate its media placement revenue growth.

In April 2014, as James discussed, a major television broadcaster agreed to license some of our patented technology for three years with options to extend the agreement to seven years. The license pays us a minimum of $1,125,000 over the three years, and if extended to seven years a minimum of $1.5 million more, in licensing fees. Our costs associated with the license, primarily professional fees, are reflected in our financial results for the quarter ended June 30, 2014, and future costs are expected to be minimal. For the quarter, we received the called for $375,000 annual license fee payment and recognized $71,918 as revenue, with the remainder to be reported as revenue over the next three quarters.

The Company generated approximately 90% or $1.9 million of fiscal third quarter revenue from its wireless applications business, which sends text and voice messages on behalf of our clients to their existing and potential customers. For the fiscal third quarter of 2013, the Company generated 100% of its revenue from the wireless application business. Efforts to build and grow complementary revenue streams through mobile advertising and monetizing IP are creating the revenue diversification that we seek. As noted, wireless applications revenue is now 90% of total revenue when it was previously 100%, and we see this positive trend continuing.

Royalties and applications cost represent the direct out of pocket costs associated with wireless applications revenue. For fiscal third quarters of 2014 and 2013, royalty and application costs were $817,554 and $804,937 respectively, which tracks the increase in wireless applications revenue.

We have achieved and now exceeded our gross margins goal for the year with an improvement to 62% gross margin for the fiscal third quarter of 2014 as compared to 58% for the same quarter in 2013. The increase is attributable to licensing and royalties revenue earned in the quarter for which there are no royalties and application costs and our media placement business that we started in December 2013 which has a relatively higher gross margin than our messaging business. Our underlying gross margin for messaging was 58% for the fiscal third quarter of 2014, which is unchanged from the 58% gross margin for messaging in the third quarter of 2013.

For the fiscal third quarter of 2014, research and development, consistent with past quarters, represented 1% of revenues. R&D expense was $12,601 in the third quarter of 2014 as compared to $13,264 in the third quarter of 2013. Compensation expense, excluding stock-based compensation, was $624,819 for the fiscal third quarter of 2014, representing a 1% increase from the same quarter a year ago.

General and administrative expense, excluding stock-based compensation, was $763,418 for the third quarter of 2014 compared to $740,951 for the same quarter a year ago. The 3% increase is largely related to sales and marketing activities in connection with our new direct sales force.

Interest expense for the third quarter of 2014 was $185,274, which decreased 62% from $490,987 in the third quarter of 2013. The decrease in interest expense is attributable to a decrease in the outstanding principal of our convertible debentures.

Our net loss for the quarter ended June 30, 2014 was $750,050 or $0.01 per share compared to a net loss of $1.3 million or $0.01 per share for the third quarter of 2013. This represents a 40% decrease that is primarily attributable to the $219,000 increase in gross margin and $305,000 decrease in interest expense. Excluding stock-based compensation, our net loss for the third quarter of 2014 was $412,188 compared to a net loss excluding stock-based compensation of $909,274 for the third quarter of 2013.

During the nine months ended June 30, 2014, we continued reducing our negative cash flows from operations as a result of 21% growth in revenues and improving our gross margin percentage from 57% to 64%. During the nine months ended June 30, 2014, on a pro forma basis, when separating out intellectual property related activities, our core underlying business generated positive operating profits and positive cash flow, a trend that was established during fiscal year ended September 30, 2013.

Our weighted average shares outstanding increased to 142 million in third quarter of 2014 compared to 134 million in the third quarter of 2013. In July 2014, we issued 8 million shares to acquire DoubleVision, bringing the total currently outstanding shares to 150 million.

Looking at the balance sheet, our cash balance during the quarter stood at $2 million as of June 30, 2014; total assets were $7.5 million; total liabilities were $6.9 million; and stockholders' equity was $600,000. For further information and details on the results, you can review our 10-Q that we filed today.

I would now like to turn the call over to Jerry.

Jerry Hug

Thanks Kurt. To expand on James' commentary, I would like to provide additional insight into the acquisition of DoubleVision Networks and why we feel it's a game-changer for us. Realizing the customer concentration risk associated with our core messaging business, we have been intently focused on a transformative corporate initiative that will enable us to diversify revenue by gaining additional customers while further expanding our product offering.

Toward that end, we targeted the mobile ad space because of the enormous opportunity and in December of 2013 we launched our FollowMe mobile advertising product with DoubleVision as our technology partner. Since that time, we have witnessed dramatic expansion in the number of potential new customers, resulting in meaningful success in winning new business across multiple vertical markets, including beverage, gaming, auto and grocery.

By owning this asset we will effectively deepen our new business pipeline, broadening the universe of potential customers to diversify our revenue mix while shortening our sales cycle, which will provide greater visibility and confidence on both revenues and margins.

So what exactly is DoubleVision? DoubleVision is a mobile demand side platform or DSP. It provides the real-time bidding software that dynamically assesses the open mobile advertising inventory in a specific location across numerous supply-side platforms to programmatically purchase the optimal advertising inventory, thereby driving a higher return on investment for its marketing clients. It was built leveraging deep expertise in financial markets and big data software environments, resulting in highly efficient programmatic trading algorithms enabling it to deliver market-leading campaign performance at the lowest possible cost.

DoubleVision was a great partner and more importantly it was the right deal at the right time, not only because it accomplished our strategic initiatives but because it was the right size and we were able to get it done at a reasonable price. Our ownership of this business now provides a clearly identified growth opportunity for the foreseeable future in the enormous mobile advertising space.

With that, I'd like to open it up for questions.

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from John Nobile with Taglich Brothers. Please proceed.

John Nobile - Taglich Brothers

I wanted to just get a better understanding of DoubleVision. My question is, if you could elaborate on how this acquisition is going to enhance your FollowMe product? I just want to get a good understanding of how that's going to benefit you in the FollowMe product.

James Orsini

Initially DoubleVision technology, we had an advertising reseller's agreement with DoubleVision and our FollowMe sales were not 100% ours. We would share the revenue with DoubleVision who would provide the technology. Now, all of that, all of the sales on our side we do 100% ours as well as the business in DoubleVision itself.

John Nobile - Taglich Brothers

Okay. And what was that revenue split between Single Touch and DoubleVision originally?

James Orsini

It was a 50-50 split.

John Nobile - Taglich Brothers

Okay, 50-50 split. And in regards to DoubleVision, I know it wasn't in the 8-K or the press release but I was hoping to find out exactly how big this company is, if you have any revenue or margin or expense numbers for 2013 or even currently?

James Orsini

DoubleVision's audited financial statements show that they did about $1 million in 2013 revenue and had positive EBITDA.

John Nobile - Taglich Brothers

Okay. And I mean do you have any expenses you could, like SG&A or anything in regards to that?

James Orsini

We'll be filing an 8-K shortly with those audited financial statements that can give you those type of details.

John Nobile - Taglich Brothers

Okay. And in regard to the current 8-K that's out there, I'm just curious if do you believe that you can achieve, there was $3 million in media placement earnout revenues to be made by July 2015, do you believe that you can actually achieve that now and how do you see yourself getting there from your current level?

James Orsini

Looking at the sales pipeline that they bring to this, we do see achieving that revenue target that's in the earnout. They come with an existing customer base that was part of that $1 million in 2013 revenue and it's a growing line of business for them. We've looked at the pipeline that would lead us to see that type of volume.

John Nobile - Taglich Brothers

Okay, I mean that's a pretty good jump from where you are now, and you said that their revenues – actually their revenues were $1 million in 2013, that's their 50% split I believe, actually what am I saying in the head myself here, but just one other question in regards to the wireless application revenues. I'm looking at it over the last trailing 12 months or even a year and a half and it seems like they've plateaued to some degree around the $1.9 million, $2 million level. I'm just curious what actions that you deem necessary that you believe you would need to grow this volume from current levels?

James Orsini

So, in looking at the SMS and messaging growth, we have first bolstered a direct sales force with people who are educated in the product base. We continue to work with our channel partners to better educate them, and with the acquisition of DoubleVision, we're now able to concentrate on channel partner sales with one of our resources as well. And we're going to have a greater focus on marketing messages solutions beyond just the typical functional messaging that we have been providing in the past. So we really see the opening of the doors of marketing solutions to be that case. We currently have two signed specialty retailers where we have seen virtually no volume on messaging yet. So we expect that that will kick in as well.

John Nobile - Taglich Brothers

Alright, great, that's all I had. Thanks for taking my questions.

Operator

Our next question comes from Bridie Barrett with Edison Investment Research. Please proceed.

Bridie Barrett - Edison Investment Research

Two questions on a similar trend, if I could. Just firstly on the DoubleVision acquisition, it's clear to me that it adds scale and reach to the business, and could you maybe just flesh out a little bit what the implications are for the gross margins, and in relation to the fact that that business comes with a real-time bidding platform, would that mean we'd see actually an expansion in your margins because it might take out some of the costs that you were previously paying out there? And then my second question is in relation to the messaging business. I was wondering if you could update us on some of the new services that you are looking to roll out with Walmart, in particular the garage service and WSC service.

James Orsini

Regarding the DoubleVision acquisition, I mean the business organically has higher gross margins than we are reporting now, and the elimination of the cost-sharing arrangement that we had with them will also naturally increase the margins. But to go back to the main point, that is that that business has a higher margin than our messaging business margin.

Bridie Barrett - Edison Investment Research

That I was aware of, I mean I know FollowMe has always and the media side has always had a higher margin, considerably higher margin, and maybe I'll just rephrase it. I guess the question is, was DoubleVision's gross margins higher than FollowMe's gross margins, or does the acquisition mean that once you've taken out duplicate cost and maybe some internal cost, that your gross margin going forward will be different to that which it has been or should we expect it to be more or less the same?

James Orsini

On an operating expense basis, we have eliminated redundant overhead costs and we have absorbed DoubleVision into our existing base of operations, and we've also from a Single Touch point of view we've done a small restructuring that consolidated an outlying office into our New Jersey operations as another means to improve the efficiency that will improve our operating margins. On a gross margin basis and the elimination of the cost sharing arrangement that we had with DoubleVision will naturally reduce significant cost from that line of business and improve the margins from what we've just reported today.

Bridie Barrett - Edison Investment Research

Okay, alright. Thank you, that's clear. And then just on the messaging side?

James Orsini

We continue to see messaging growth with our largest client and we are excited about some of the marketing messages that are about to come out and just launched with a national launch on August 4 for the Savings Catcher where we are involved in that at the point-of-sale 4,500 locations, and we also are working with them in conjunction with their e-receipts campaign. So we're seeing significant messaging growth from under 1,000 per day just a couple of months ago to tens of thousands per day today.

Bridie Barrett - Edison Investment Research

Okay, thank you.

Operator

Our next question comes from Chad Nelson with Thomson. Please proceed.

Chad Nelson - Thomson Horstmann & Bryant

Just a couple of quick questions, one particular maybe to sum up the DoubleVision conversation, Jerry, you mentioned that you believe it will shorten the sales cycle. Can you help me understand a little more about that, maybe I missed it?

Jerry Hug

Sure. So if you look at our traditional core SMS business, the sales cycle historically in that line of business, Chad, was anywhere from six to nine months. If you look at the sales cycle that we're experiencing with FollowMe, it is very indicative and similar to what you see in just traditional media. So a lot of what we're seeing is, marketing campaigns are now starting to incorporate a mobile component, there are large budgets and RFPs associated with those campaigns and those campaigns now have definitive launch dates with timeframes around significant and material events for our advertising and retail clients. So we're seeing the sales cycle on that product range anywhere from two weeks to two months.

Chad Nelson - Thomson Horstmann & Bryant

Okay. And Jim, you had mentioned, so FreshDirect is going to begin to contribute in 4Q and you signed I think you said another national, I missed that, but one of the – and you said you're in the process of provisioning the carriers, one of the things I thought about when I heard you say that was the Zoove settlement, right, and so that was supposed to enable you to do that much quicker, what can you share with that?

James Orsini

So we have signed an agreement with a health and wellness specialty retailer with over 800 locations where we will be sending marketing SMS messages. In this particular case, the provisioning was around a vanity short code not an abbreviated dial code as you're referencing with Zoove. So an abbreviated short code is when you're texting a keyword to a short code. And we are getting that up and running on each of the major carriers and we expect that the messaging will flow before the end of this calendar year for that retailer.

Chad Nelson - Thomson Horstmann & Bryant

Okay, alright. I mean just kind of looking at it from a contribution standpoint, can you share order of magnitude what you think these programs are worth, I mean are they several hundred thousand dollars or more or less, how do you think about that?

James Orsini

The marketing programs tend to be larger than the traditional functional messaging alerts only because as Jerry mentioned on the side of the FollowMe, there are repeat campaigns. They are pushing messages around Black Friday, there are events that continually go on throughout the holiday calendar year. If I'm not mistaken, the average retailer has about 36 weeks of promotional type activity that they plan for in this. So marketing messaging in and of itself tends to be greater and a few hundred thousand dollars is the norm for our marketing messaging campaign.

Chad Nelson - Thomson Horstmann & Bryant

Okay. And just a couple of quick more, one on FollowMe, one on messaging. So on the messaging side with the contribution of the e-receipts and Catching Savers this quarter, I mean my guess is this quarter, the third calendar quarter, is it reasonable, I know you don't give guidance but is it reasonable to expect that we're going to be looking at messaging growth north of 10% again with those two programs?

James Orsini

That's a reasonable assumption.

Chad Nelson - Thomson Horstmann & Bryant

Alright, good. And secondly, I think you said 4,500 test stores, is that right for e-receipts?

James Orsini

Yes, it's in 4,500 locations right now.

Chad Nelson - Thomson Horstmann & Bryant

So what's the opportunity for a nationwide rollout there?

James Orsini

That is the nationwide rollout.

Chad Nelson - Thomson Horstmann & Bryant

I mean worldwide, across all their affiliates, I'm sorry.

James Orsini

No, it's a U.S. offering right now.

Chad Nelson - Thomson Horstmann & Bryant

Okay. And just one more on FollowMe and I'll jump back in the queue. So it seems like you guys are starting to get some repeat orders which is key for that business, right, some kind of one-buy to being a regular quarterly buyer, what can you share with respect to repeat orders and it will be great if you have any campaigns you can kind of talk about, the metrics that you guys have achieved for these brands?

James Orsini

So first I'll take the first question, Chad, and this also speaks to John's earlier question about how do we see achieving that $3 million earnout milestone. So what we're seeing in this mobile advertising business with our client roster is that we're onboarding clients that are buying mobile for the first time, and what you see is that our success in the offering is causing them to re-up. So we're seeing about 90% retention rate in our clients for repeat campaigns. So as that builds up on itself, we're going to see that scale pretty significantly. As it relates to specific campaigns and case studies, we will be putting out some success case studies in the near future in conjunction with our clients in various verticals as we look to talk about our success in this space.

Chad Nelson - Thomson Horstmann & Bryant

Alright guys, I'll jump back in queue. Thanks.

Operator

Our next question comes from [Paul Costigan] (ph), a private investor. Please proceed.

Unidentified Participant

It's [Paul Costigan] (ph). I'm just wondering how you're doing with getting any of your new patents issued by the patent office and if you have expecting any new licensing agreements to be forthcoming, because the only way I see those things after convertible notes coming due this September and October is to get something like that done, is there any activity in that area?

James Orsini

So, Paul, I think it's important to note that silence in the IP space, don't misconstrue that with lack of progress. So we continue to make progress on improving our IP portfolio, we do anticipate additional patents being issued in the streaming media and dynamic ad insertion family of patents. As soon as we do have those, confirmation of those issuances, we will confirm that accordingly and communicate that accordingly. And with respect to the issue about our convertible debt, I think it's important to note that we are in communication with our debt-holders and we're very confident that we will have a strategy in place to deal with the maturity of our debt prior to that event.

Unidentified Participant

Okay. And are you working on agreements, so you just – there is nothing you can tell us about it, is that it?

James Orsini

So we continue to have multiple discussions with potential licensees that are in various stages, and once something happens that is material, we will communicate it at that particular time. It's just not appropriate for us to talk about any of those discussions given the sensitivity and the confidentiality that we have given the nature of those discussions.

Unidentified Participant

Alright.

Operator

There are no further questions at this time. I would like to turn the floor back over to Mr. Orsini for closing comments.

James Orsini

We want to thank everyone for joining us today. We hope that you see that the future is bright here at Single Touch, we're optimistic about the moves that we are making and the role that we'll play in the mobile media space going forward. We look forward to our next earnings call and sharing new developments as they unfold throughout this quarter. Thank you.

Operator

This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation.

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