Q3 2020 eMagin Corp Earnings Call
[music].
Good day, ladies and gentlemen, and welcome to your imagine.
Third quarter 2020 earnings call all lines have been placed on a listen only mode and the floor will be opened for your questions and comments following the presentation.
If you should require assistance throughout the conference. Please press star zero to reach a live operator.
At this time it is my pleasure to turn the floor over to markets. Sir the floor is yours.
Good morning, everyone and welcome to our third quarter 2020 conference call. We're very glad to have you join us today [noise].
During today's call we may make forward looking statements as defined in the private Securities Litigation Reform Act of 1995.
These forward looking statements are based on the company's current.
Spectator runs projections and beliefs and are subject to a number of risks and uncertainties such.
Such statements May include references to projections of future revenues plans for product development and production the company's ability to ramp up production the company's ability to reduce its cost structure.
Next future contracts and agreements product benefits operations future financing liquidity and capital resources as well as statements containing words like believe expect plan target et cetera, you.
You should not place undue reliance on these forward looking statements because they involve.
Owned and unknown risks uncertainties and other factors that are in some cases.
Beyond our control.
Please refer to our earnings release for the third quarter of 2020, and the company's filings with the Securities and Exchange Commission for information concerning factors that could cause actual results to differ materially.
Serially from those expressed or implied by such statements.
We undertake no obligation to update or revise any forward looking statements to reflect future events or circumstances.
During this call. We will also refer to adjusted EBITDA, a non-GAAP financial measure to provide additional.
No information to investors a reconciliation of adjusted EBITDA to net income, which is the most directly comparable GAAP financial measure is provided in the press release that we issued this morning.
Non-GAAP financial measures such as adjusted EBITDA I'm not meant to be considered in isolation.
Or as a substitute for GAAP financial measures and financial statements with that I would like to turn the call.
Call over to our CEO, Andrew Sculley, Thank you Mark and welcome everyone to our third quarter earnings call. This morning I.
I hope that everyone is staying safe and healthy.
On today's call I will.
I will provide some key takeaways from our quarterly results.
And then provide you with some color on our end markets technology advances and our new department of defense funding and equipment schedule.
Mark will then discuss our consolidated results in greater detail.
As far as key.
Perfect ways, we remain extremely well positioned in the military end markets military revenue in the third quarter increased 19% year over year.
Reflecting our position as the sole supplier for the multi year NBG beat program as well as growth in Internet.
Additional markets.
During the quarter. We also placed orders for the new equipment provided under the $5.5 million I Best program for OLED supply chain assurance and are progressing in regard to the design order phase for the $33.6 million Department.
You're not Defense award.
Our backlog remains strong at $10.0 million of which 9.4 million is shippable within the next 12 months.
In addition, we ended the quarter with cash and cash equivalents of $10.3 million.
Third quarter also reflected the economic impact of the COVID-19 pandemic.
On some of our end markets, particularly in the area of elective surgeries for eye care.
Which affected medical related sales.
And also high end hunting scopes.
Additionally.
Really contract revenue was lower in the period due to the completion of part of a project for a tier one consumer company that will become active again in the fourth quarter.
As a result third quarter revenue of $7.3 million decreased.
8% as compared to revenue of 7.9 million.
Versus a year ago.
We expect contract revenue to improve sequentially in the fourth quarter.
Lastly, we continue to retain our technology and innovation edge as demonstrated by our accomplishments for improving our OLED architectures, which will be used in direct patterning.
And our new XL, the OLED displays moving towards production qualification.
I will now discuss our quarterly trends in greater detail.
We had a very strong quarter for the military display sales at $5.5 million or a 19% increase over this quarter last year.
We are supplying displays to some major programs and demand has remained solid.
In particular.
We are the sole supplier for the Vg beat program and will supply the program through its low rate initial production phase in 2021 and beyond.
This is a multiyear program.
Bran that includes both thermal and night vision channels, where our high resolution Microdisplays interface with the Armys family of weapon sights and battlefield awareness systems.
During the quarter. We also continued to produce displays for the F 35, H.M.D. helmet program.
It has been widely acknowledged that these helmets equipped with our high brightness OLED microdisplays have been critical in night landings on aircraft carriers and have been instrumental in eliminating the green glow from Lcds, which was reportedly very disturbing to pilots of the F 35.
With wrist.
With respect to the international military market, we had increased shipments globally and supplied an initial order to one of the top five European military electronics manufacturers and new and important relationship for us.
Turning to our other end markets.
We saw a year.
Over year decrease in the medical display market, which we believe was related to a likely postponement of electric surgeries for example, cataract surgery by the older population.
We have since seen recovery receiving orders for medical related Microdisplays, which will begin shipping in April.
In 2021, as hospitals and medical centers resume performing elective surgeries.
Additionally, we supplied displays for some high end hunting scopes, which we believe are affected by the COVID-19ien situation, including lower demand for discretionary spending.
We are not expecting.
Opening near term pickup related to this market until Cove it has more control.
Our contract revenue was decreased in the third quarter by approximately $343000 year over year, Although we continue to work on the design project for a tier one consumer company, we completed the wafer designed for.
For this company and it is now being fabricated at a foundry we anticipate receiving these newly designed wafers in early Q2, and then we will begin to directly pattern. The OLED. There are additional aspects of this program, which we are currently performing.
We also made improvements earlier this year to our direct.
Patterning tool and are continuing our development work as we advance high brightness.
We have been able to demonstrate a three X increase in throughput.
With the newly upgraded tool, which we believe is important to demonstrate production readiness and for the design of the funded direct patterning.
Okay.
We are currently working on our color OLED stacks to achieve our targeted 10000 candela per meter squared brightness using single stack OLED for the Red Green and Blue sub pixels.
We are close to our goal with each of the colors.
The next step is further up.
Possession of the deep deep process, using these new OLED architectures and producing direct pattern displays.
In the future, we can move to tandem stacks and other improvements to retain the highest full color brightness OLED microdisplays in the market.
The important point here is we are ahead today.
And believe with DPG, we will remain ahead of white with color filters.
And I want to update you on the progress with our government awards totaling approximately $39.1 million over the next three years.
We placed orders during the third quarter under the $5.5 million.
Bass supply chain assurance program.
And are working on the design order phase for equipment and the other Deo D program for $33.6 million. We are very excited about these awards, including the expected impact on our manufacturing.
We anticipate.
Saving our first piece of new equipment in December.
This tool is for advanced testing and diagnosis, we expect it will help us to improve our yield beginning in the first quarter of 2021.
Additional early phase equipment is scheduled to arrive in the second quarter.
And we will immediately begin testing.
Being in qualification at that time.
With that I'll turn the call over to Mark.
Thank you Andrew before I discuss our third quarter 2020 results for the period ended September Thirtyth 2020, I'd like to provide you with a few key financial takeaways from the quarter.
We reported revenue of $7.3 million with continued strength in our military business, which grew 19% year on year two of five and a half million for the third quarter.
R&D contract work with approximately zero point $3 billion as we completed one phase of the wafer design firm.
One of our tier one consumer companies.
We expect our contract revenue to increase in the fourth quarter as we continue to work on this unique design.
We ended the third quarter of 2020 with a cash balance of approximately $10.3 billion.
Including six proceeds of.
$6.5 billion from the remaining balance of our July ATM funding.
Plus we had availability of 2.3 million under our asset based lending facility.
Now moving onto the third quarter results.
Total revenues for the third quarter of 2020 were 7.3.
3 million a decline of 0.6 million reported in the prior year period, and zero point $4 million from the second quarter of 2020.
Total revenues consist of both product revenue and contract revenue.
Product revenues for the third quarter of 2020 were 7.0.
<unk> million, a decrease of zero point $3 million from product revenues of 7.3 million reported in the prior year period.
The decline in product revenue was due to lower sales to medical and commercial customers related to the economic impact of COVID-19.
Contract revenues to.
Year old point $3 million compared to 0.6 million reported in the prior year the.
The decrease in contract R&D work reflects the timing of completion of various projects.
Third quarter pause between work stages with one of our tier one customers.
Gross more.
Margin for the third quarter was 23% on gross profit of $1.7 million compared to a gross margin of 31% on gross profit of $2.5 million in the prior year period.
The decline in gross margin resulted from lower shipments of display.
And lower revenue.
Operating expenses for the third quarter of 2020, including R&D expenses were $3.6 million as compared to 2.9 million reported in the prior year period.
Operating expenses as a percentage of sales were 49% in that.
Third quarter of 2020 compared to 36% reported in the prior year period.
R&D expenses were higher in the third quarter, primarily reflecting a focused on R&D projects related to VPT technology, and our excess lead display development.
Its DNA expenses were essentially flat versus the year ago period impacted by salary reductions implemented in October 2019, and reduction in noncash stock compensation for the board of directors implemented in December 2019, and lower travel and other discretionary.
Expenses.
Operating loss for the third quarter of 2020 was $1.9 million compared to an operating loss of zero point $4 million in the prior year period, reflecting lower revenue year over year and higher R&D expense.
Net loss for the third quarter.
2020 was $3.5 million or 0.6 cents per share compared to a loss of zero point $3 million.
Or one cents per share in the prior year period.
Net loss for the current and prior year period reflects a 1.8 million noncash loss.
Shift and a 0.1 million noncash gain related to the change in fair value of warrant liability respectively.
Adjusted net loss for Q3 of 2020, excluding the change in the fair value of the warrant liability was 0.3 cents per share compared.
To a net loss of 0.1 cents per share in the year ago period.
Adjusted EBITDA for the third quarter was negative $1.1 million compared to a positive zero point $3 million in the prior year period.
Liquidity.
Tim.
Thirtyth 2020, the company had cash and cash equivalents of $10.3 million compared to 3.5 million at December 31 2019.
We had working capital of $14.5 million.
Borrowings and availability under the ABL facility was zero point.
$5 million and $2.3 million, respectively at September Thirtyth.
During the second quarter, we received $1.96 million of PPP funding under the SBA loan program.
And for which we intend to apply for forgiveness in Q4.
During the.
Quarter, we raised the remaining 6.5 million available under our ATM facility, which provides us with ample liquidity and no near term need for additional fundraising.
As of September Thirtyth 2020, the company's backlog of orders shippable within 12 months was 9.4 million.
Ian.
Compared to a backlog of $11.7 million as of December 30, Onest 2019.
With that we will open the call for questions.
Thank you ladies and gentlemen, the floor is now open for questions.
You do have a question. Please press star one on your telephone keypad at this.
<unk>, if you're using a speaker phone, we ask that while posing your question you pick up your handset to provide the best sound quality again, ladies and gentlemen, if you do have a question or comment. Please press star one on your telephone keypad at this time.
We'll take our first question from Jim Mcilree with Bradley Woods. Please go ahead.
Yeah. Thank you good morning, Hi.
You spoke about cobot related delays in the in the medical.
Industry and I'm, just wondering if those delays have.
Lengthened or increased recently.
Given the despite can go the cases.
Well, we have received a a significant.
Oh water for that a business, it's about a million dollars and that to be delivered or early next year. So we're optimistic that it is.
Going to continue.
Eventually people have to get back in for example, the cataract surgery. This is a cornea map device cataract surgery requires that beforehand and it's usually.
The older population, who is concerned but it has to start again.
And with the significant.
Order of a million dollars in total approximately were very optimistic.
And the delays that you noted were those delays.
Because the end users were delaying processing fees or was it because you had.
I mean, it was difficult to make those deliver.
Are you there on your end or there were no order and there is no issue at all we've been making deliveries I had I shouldn't say no issue we've had some little hiccups.
For example, two cases early the year, but we have managed through this and done very well keeping everybody healthy and doing everything.
Libert at the New York State.
Says, we should do we are doing it so our deliveries have been fine and the discussions with the customers. There are handful of customers and that hunting scope market that we mentioned and their their comments was that.
Was a co good related.
So that's why we said that.
And I.
I know, it's really early to talk about potential changes and that's market within that the new administration, but maybe I'll press you a little bit on it can you can you talk about one just generally what you what your thoughts are.
On the new administration and defense spending.
And secondly.
Can you discuss your defense business.
Relative to.
Programs that are in production like the JSF versus.
Versus.
Programs that are in.
Our rep versus programs that are still more into the early stages before it's become a a program of record and I think those are all my questions. Thank you, okay, well I can't really predict what the new administration will will do but our customers are very optimistic and.
As you might guess we have.
Very good connections with the.
US government and that there, they're very good with us about the $39 million they granted to us. So we're working very hard on that as well.
So we are optimistic that the the military spending will continue.
[noise].
And we have very important programs here like enhanced night vision goggles binocular program that is a very important program for the military there are over 100000 units that.
The Palm says they will procure over the life of it and if you see.
Good.
Give that a few years five years, even that's a very big big important business for us.
So we're optimistic that we'll continue that's a part of the answer to your one question that's.
In the low rate stage near term.
The other thing is the a in the qualification time for us.
Just as the F 35, as you know the helmet with our displays and it is being qualified for the F. 35, and you can look on line to see what issues. There are four lcds.
And that is still moving forward because it's it's an important program. The F 35 is very important.
The.
The helmet, so with an OLED display gives the right contrast, and has a very outstanding performance. So we we think that will continue we do also work on new programs and this is directly with customers.
We're looking out beyond the E N BGB we are working.
On that with our very high brightness displays and I like to take a step back and say the reason that we are.
Talking to companies on this is because when we first started this super size weight and power and our our displays have much better.
Power consumption.
And then the alternatives.
And we have designed our displays to fit very well into military and they've been doing this since.
The early two thousands and we're very well respected by the us military and foreign militaries.
So our displays then they asked for high.
Contrast, and Thats the green glow issue that we talked about EPS for high contrast, we can deliver that and they asked for high brightness and we've done this in multiple facets. One is with a white with color filters thats in qualification now our qualification that is and we have received.
Very many.
Companies asking us for that display because they want to go to the next step and brightness.
In our direct patterning is very well positioned in the military to move forward and that's a big chunk of that $39 million was for a machine that can do this right now it's in R&D.
And it's also very interesting that the Aer VR market comes to us for the same thing they want high brightness and a high resolution so that the screen door effect goes away. So the technology that we have built is very well respected by the us and foreign governments.
And.
And it's also respected in the AR VR game.
Group.
So I hope that answers your question, perhaps a little little more than you asked for you have a follow up to that.
No. That's a great answer I appreciate the detail. Thank you very much and good luck with everything thank you Sir.
Well take our next question from Michael Private Investor. Please go ahead.
Good morning, good morning migrating Michael.
If it's okay I would like to go back and ask a question about one of the comments that you made in the Q2 PR or you are kind of talking about.
Got a few.
Recent patent patent that you were awarded.
And the comment kind of imply to me that your business model may include licensing your technology to other OLED micro display competitors.
If I got that right.
Could you, maybe just talk a little bit about what that might look like and the strategy behind.
Doing something like that.
Yes. Thank you in here, we're talking about very high volume if the consumer volume is a million or millions of displays per month, we don't have that volume even with.
The $39 million that Eurs government has granted that will not give that volume so our path forward and the tier ones with whom we have talked and are talking.
We are interested in this path forward because they want to have millions of displays.
For months, so we have discussed with some mass production partners and im not saying competitor micro.
OLED companies necessarily there are other ones in the display industry that we talk to it.
And the the way to do this is to develop a proof of concepts we've worked.
The number of them.
And then to license the consumer company.
And with that consumer company or companies I should say to have a mass production partner.
Move forward with the manufacturing of our technology.
So the way it would.
Duck like Van is we license a consumer company, who has the mass production partner build the displays as such.
Sub licensee in that respect for that consumer company and then we get royalty revenue.
Okay Zack.
Well I was just curious if it didn't turn out to be.
Oleg.
Micro display competitor what.
That that license allows them to.
Both manufacturing and sell those displays.
To consumer care launch or.
Oh, no are going away.
We would be very cautious.
It's about this and my background has licensing in it of OLED.
We've licensed tier ones in the display industry in my past and we've actually license the tier one company now you can look back in our reports we have one license, which by the way that company keeps in contact with us.
She is interested in moving on with the mass production of this as well so no we would restrict the license so that the company it for where a competitor of ours couldn't take over all of the business from us.
Okay.
Alright makes sense.
So I'll I'll.
I also want to acknowledge your more much more active role with Steve.
Investor presentations over the last six months here.
And I think one other thing that stands out to me as the.
Strong growth potential really across all of your end markets.
And maybe we could.
Specifically about the military and EPS.
Aviation side, I think you had some data showing that the addressable market for.
On the flip side to that we are.
Positioning the product from a price perspective in an attractive way.
And the fact that we are looking to where.
With LCD displays versus OLED.
Yeah, I think the thing you have to think about for LCD versus OLED is if you only want to very cheap display you're using it fair during the daytime and you have a cross.
Hair in there that might move around and it doesn't matter as soon as it matters like you need high contrast, because its night vision as well as.
Daytime views.
Mike by the way the F 35 than an OLED display is what you need.
And so I think that as time moves on.
John and you can see this by companies how many LCD companies are there and how many LCD companies are also thinking OLED is the way to go.
So I think not only as the U.S. government and the foreign companies with whom we deal.
And as you know we have French companies Israeli companies.
Kish companies some.
Some Asian like Korea, et cetera that use our displays we're we're almost half and half on a display sale outside the us versus inside so I think the world thinks OLED is going to take over.
Okay and then my last question here.
Third on the consumer side, which I think everyone on.
Understands is still out there may be two to two or three years away.
But maybe you could.
Talk about some shorter term catalyst that investors might.
Look to over the next three to six month.
For me the catalyst that what I see as.
I can look at what the.
The market researchers put out there, but what drives me to think that this market will take off is because we talk to the companies themselves who are interested in this and I know today is today's a R.
Our VR devices.
Let's pick on VR for a minute because there everybody knows that the today's our larger displays cell phone size displays with OLED and once the complaint the complaint is the.
Screen door effect, so when companies come to us They say hey, we want the next generation.
And to be.
A display that has no screen door effect, so you need a very.
Very high resolution and I'll just give you. An example, sorry for the numbers I'm going to give you, but if I want 100 degree field of view and I want to.
To match the Ais capability in resolution, that's got to be somewhere between.
30, and 60 pixels in every degree are going to pick 40. So a 100 degree field of view 40 pixels per degree I need 4000 resolution and that by the way is the reason we designed to 4000 display.
And that's that's what the companies want when they come to us so near term what.
I mean, you have to look at is if we are allowed to say anything about our proof of concepts. For example, the 4000 resolution display the new display we're we're working on subscribers.
Subscribers that you can provide.
Yes, so actually.
We had the golfing to use us and as you know under.
Our direct to consumer we all their proof of concept also goes and as demonstrated to the market, which obviously, we would like to see happen because the companies for whom we.
Work on a proof of concept theyre actually developing a proof of concept headset, so that would be a.
Catalyst for the market as well.
Once one of these headsets comes out and people see how absolutely.
Fantastic. It is not only know screen door effect, but very high contrast, also very high brightness is neat he did because the.
The motion artifacts.
I have to be eliminated and therefore I'd be happy to explain this some other time you need very high brightness.
So very high brightness is necessary and also the optics are in 100% effective efficient. So that also contributes to the brightness. So the display type that is needed remember I said high contrast, I also didn't mentioned very high.
Feed all of that leads to an OLED the very high resolution and you don't want a huge form factor like a scuba diving mask that leads to a microdisplay. So the display of choice today is an OLED microdisplay and Thats why the companies are talking to US we have the technology to give.
That brightness and I know you've heard other companies talk about things like tandem architecture dual stack. Obviously, we can do that with each color for hours and that will essentially double the brightness. So were ahead today and we will stay ahead with direct patterning that is our belief.
And Thats why companies come to us.
Okay, maybe just one follow up on what the manufacturing.
Partner discussions I think ill just going back to.
Our 2017.
I feel like investors have been kinda condition too.
Well, maybe you expect the timeline look like.
Partnership lead time would be roughly 18 months before a product launch.
I was just wondering if we you know if we don't see something over the next few months does that does that indicate that maybe.
These product launches are being delayed a bit or not necessarily the case.
Oh the companies that we're dealing with certainly are.
Pushing us very hard to get these things done quickly so I and I forget how many months did you say over the next three months I don't think.
The you will see any company announcing anything within three months because the proof of concept, where we're working on with them and they're working on the same thing. So this will be a test for them, but I do feel like there's great belief in a consumer electronics companies that this is a path forward.
And the EPS.
EPS.
Everyone, we talk to wants to move beyond the cell phone size style display.
So this will come out.
And I know if you look at market Research you mentioned 2017, if you look at market research in 2017 versus now they're predicting a little later.
But the companies were dealing with want to move forward with this.
Okay. Thank you very much for taking my call and answering the questions no problem. Thank you.
As a reminder, ladies and gentlemen, if you do have a question or comment you May press star one on your telephone keypad at this time.
We'll take our next question from Ben Andrew Andrew Capital Management. Please go ahead.
Good morning, Andrew Good morning, Mark how are you guys.
Good morning, Ben.
Hi, Andrew.
Me just trying to understand maybe what the industry consumer industry thinks and.
Kind of what the math is involved that theyre looking down okay. So if we look at.
The largest VR headset guy out there in the last couple of quarters. They they launched a new version of their of their headset and they went from a pentile over to to an LCD.
The red stripe.
Type of display.
Now is that technology.
Good enough for what people want out there because I would think if you're.
On the run rate to sell over 2 million headsets, a year, you're definitely throwing off enough.
Cash flow.
To build a $100 million fab and to bring the cost of an OLED display Dallas.
But yet they didn't do that so what's the math there looking out or what do you think they're thinking.
Well in this case they the.
In L.C.D. you can post the backlight and therefore have the motion artifact problem is you still have to two issues. Even though you can have a higher resolution a cell phone size.
Size display for.
For VR, its still not high enough to get you what you need and.
The other thing is L.C.D.'s contrast, this poor and you know this anyone listening if you have a and L.C.D. TV and you have cable box that you turn off but you forgot to turn off the TV and the darkened room, you know the TV still on and that's that Green glow problem for the F 35 as well so.
I don't think lcds are going to be there and neither do the companies who are talking to us for the next generation. So the question you have to ask is the.
The proof of concept has to be done first for these companies and by proof of concept I don't mean, only our work on the display with their work.
On the headset and they have to believe this market is going to take off which they all do that's why they're talking to US and then we have to work together with a mass production partner.
Before Jay maybe $1 million is going to go into this.
But there are companies who have money as you.
And I know and there are companies that are interested in a next generation and.
And we believe direct pattern OLED Microdisplays are the next generation.
Yes, and I mean, if if you looked at these guys. They are by far the leader in the industry auto.
No other markets.
There is at least 40% maybe as high as 60%. So is that I mean are these guys seeing this is enough volume.
Go ahead, because if you go back two years ago I mean, they were clearly thinking leaves the exact same things, but my guess is they didnt push forward because the volumes one better.
I would I would estimate that it two years ago the volumes weren't there because they're not here right now, but I do think that.
Everyone, we speak with on this consumer electronics cost companies and beyond that right its industrial and in medical as well.
For these they are VR and an example of industrial we have a new.
Welding helmet company, so that's a and augmented type reality thing. So that's this market will take off is what people believe it's just slower than than we originally had thought.
Ill.
Thanks, and switching to the military I've seen one of your competitors when some of these family of weapon sights approach.
<unk> programs and I.
I heard you mentioned earlier.
The last question about.
No L.C.D.'s are good enough if he got cross Harrison.
In the picture or my guess is if you don't need a wide field of view as well.
Does that mean that.
There is this.
A handful or more of these family of weapon sights contracts that you're just not a fit for because you.
Either you got a more expensive.
Our result, that's not really needed for for for certain out Tom for certain type of site.
Well we are in competition on a there are a few site programs and we are in competition.
For the ones that haven't been awarded so I think that.
If you.
I want to have a an image that works a daytime and nighttime high contrast image with Ah things like a thermal imaging.
In a in all that is the way to go and I'll just point to the F. 35, why why are they qualifying a helmet with.
OLED <unk> because that is what's needed for the full range of operations why are we the sole provider for enhanced night vision goggles binocular program, because that's what's needed. That's a that's a a helmet that or a helmet yet so it's a site that actually that goes through the gun too you can.
You can have a wireless lee attached to the to the gun side also so.
So that's what's needed and I think that OLED is the is the way to go.
Thank you both.
Okay.
Thank you very much.
Yes.
Once.
Ladies and gentlemen, if you do have a question or comment you May press star one on your telephone keypad at this time that's star one on your telephone keypad to ask a question.
And there appear to be no further questions at this time.
Well, let me just to make a few closing remarks I sank.
Thank you all for joining us on the call and thank you very much for the.
Mike Benton, Jim who asked the questions, it's great to be able to to answer them I I'm very optimistic about the future because of the military business in the U.S. and outside the U.S. 39 million dollar.
<unk> funding for our new equipment will improve our our throughput and yield significantly and give us the the basis to produce all military business isn't new OLED tools that are using this direct patterning and by the way, even though company or how much like the F 35.
Five we are using monochrome green today, I guess, what they all ask us for can you do color and direct patterning is the way that we can do color. So I'm very optimistic about the.
US and international military business that that will continue to use OLED and use our displays because they.
They meet the criteria and also given the conversations we are having and we have had remember we also have a licensee for our direct patterning old.
OLED with a consumer electronics company. So there's belief in that market that this is the way to go as well and I think the next.
Next generation you will see some some significant headsets with OLED Microdisplays and we're working very hard with those consumer electronics companies and.
Working with mass production partners to get this to go.
So the other thing I need to say is I. Thank you very much to the imagine team.
They have been outstanding we're all working through this cove. It every day, we get our temperature measured if there's any issue at all week, we take action.
If anyone travels we do exactly what the New York State requires and we've been using zoom conferences and were in the room, if we sound that.
<unk> bussell that anytime we have masks on this is what we do and imagine so I think the imagine team very much for the effort.
So thank you very much on the conference call.
Ladies and gentlemen, this does conclude today's teleconference. We thank you again for your participation you may disconnect at this time and have a great.
Good day.
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Great.
[music].
Oh.
[music].
Oh.
[music].