Q4 2024 LightPath Technologies Inc Earnings Call

Speaker Change: Tuesday and welcome to the Light Path Technology Cisco Flow Squador 2021, our new conference call. Albert Distance with the in-depth and only mode. Shoulder need assistance with signal or conference specialist, vice president of Star Key, follow the light hero.

Operator: Cisco's fourth quarter of 2024 earnings conference call. Albert's expense will be in like an only moment. Shouldn't it assistance to signal a conference specialist by pressing the star key followed by zero?

Operator: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press start and warn on your telephone keypad. So which are your questions? Please press start and choose. Please note, this event is being recorded.

Speaker Change: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press start and warn on your telephone keypad. So wait for your question, please press start and choose.

Albert Miranda: I would now like to turn the conference over to Albert Miranda, Chief Financial Officer. Please go ahead.

Speaker Change: Please note, this event is being recorded. I would now like to turn the conference over to Albert Miranda. Chief Financial Officer, please go ahead.

Albert Miranda: Thank you.

Albert Miranda: Good afternoon, everyone. Before we get started, I'd like to remind you that during the course of this conference call, the company will be making a number of forward-looking statements that are based on current expectations, involve various risks and uncertainties, and are discussed in its periodic SEC filings. Although the company believes that the assumptions underlying these statements are reasonable, any of them can be proven to be inaccurate, and there could be no assurances that the projected results would be realized. In addition, references made by maybe made to certain financial measures that are not in accordance with generally accepted accounting principles or GAAP.

Albert Miranda: Thank you. Good afternoon everyone.

Speaker Change: Before we get started I'd like to remind you that during the course of this conference call

Albert Miranda: The company will be making a number of forward-looking statements.

Speaker Change: The are based on current expectations, involve various risks and uncertainties and discussed in its periodic SEC filings.

Speaker Change: Although the company believes that the assumptions underlining statements are reasonable, any of them can be proven to be inaccurate, and they can be no assurances that the projected results would be realized. In addition, references made by...

Speaker Change: Maybe made to certain financial measures that are not in accordance with the generally accepted accounting principles or gap.

Albert Miranda: We refer to these as non-GAAP financial measures. Please refer to our SEC reports in certain of our press releases, which include recommendations of non-GAAP financial measures and associated disclaimers.

Speaker Change: We refer to these as non-gap financial measures, please refer to our SCC reports and certain of our press releases, which include reconciliation of non-gap financial measures and associated disclaimers.

Albert Miranda: Sam will begin today's call with an overview of the business and recent developments for the company. I will then review financial results for the quarter and the full year following our prepared remarks.

Speaker Change: Sam will begin today's call with an overview of the business and recent developments for the company. I will then review financial results for the quarter.

Albert Miranda: There will be a formal question-and-answer session.

Speaker Change: and the full year following our prepared remarks that will be a formal question and answer session. I would now like to turn the conference over to Sam Rubin, White Pats, President, and Chief Executive Officer.

Sam Rubin: I would now like to turn the conference over to Sam Rubin, my past president and Chief Executive Officer.

Sam Rubin: Thank you, Al. Good afternoon to everyone and welcome to Light Park Technologies' fiscal fourth quarter and full year 2024 financial results conference call. As always, our financial results, first of all, was issued after the market closed today and posted on our corporate website. Fiscal 2024 was an important year in our transformation for a pure component supplier to assistant providers, delivering during the year new products, new contracts, and starting to see growth driven by these new product lines. Just over three years ago, we set on a new course with a new strategic direction, taking us from being a pure component supplier to a systems or solutions provider.

Sam Rubin: Thank you, Al. Good afternoon to everyone, and welcome to Lightfast Technology's Fiscal 4 Quater and 4 Years, 24 Financial Results Conference Call. As always, our financial results press release was issued after the market closed today and posted our corporate website.

Speaker Change: Physical 2024 was an important year in our transformation for a pure component supplier to a system provider.

Speaker Change: Delivering during the year, new products, new contracts, and started to see growth driven by these new product lines.

Speaker Change: Just over three years ago, we set on a new course with a new strategic direction, taking us from being a pure component supplier to a systems or solutions provider.

Sam Rubin: For those not familiar with this, I will provide a brief overview. Prior to this shift, Light Park has been, for the greater part of 30 years, an optical component provider. What many years ago was a unique technology, molded optics, had become over the years a crowded marketplace, going through the classic transformation and commoditization. As such, Light Park's core business was eroding, unit prices decreasing, and with them margins and profits. In 2021, we set a course on a new strategic direction, one that leverages some of our key technologies to deliver subsystems and system-level solutions instead of just components.

Speaker Change: For those not familiar with this, I will provide a brief overview.

Speaker Change: Plyotidist shift, Lightpath has been for the great part of 30 years, an optical component provider.

Speaker Change: What many years ago was a unique technology, molded optics, had become over the years a crowded marketplace, going through the classic transformation and commoditization.

Speaker Change: As such, Lightfast Corbusiness was a voting, unit places decreasing and with them margins and profits.

Speaker Change: In 2021, we set a course on a new strategic direction, one that leverages some of our key technologies to deliver subsystems and system-level solutions instead of just components.

Sam Rubin: Aiding in this have been two important shifts happening in our industry. First, optics or photonics more generally, as a whole, is being used in one more application than industry. More times than not, those new customers starting to use a technology, seek a partner that will provide a complete optical solution, rather than components they would need to build in themselves. So essentially, the structure of the supply chain of our industry is changing, creating an opening or an opportunity for a company like Lightpth to become a solutions provider. This transformation has been very successful, and in this fiscal year, we reported that 20% of our revenue came for those activities.

Speaker Change: Aiding in this have been two important shifts happening in our industries.

Speaker Change: First, optics, or photonics, more generally, as they hold, is being used in one one application than industries.

Speaker Change: More times than not, those new customers starting to use the technology, seek a partner that will provide a complete optical solution, rather than component they would need to build in themselves.

Speaker Change: So, essentially, the structure of the supply chain of our industry is changing, creating an opening and opportunity for a company like Light enough to become a solutions provider.

Speaker Change: This transformation has been very successful and in this fiscal year we reported the 20% of our revenue came for those activities.

Sam Rubin: This type of revenue hardly existed before we began going down this path. The second change happening that enabled us has been around infrared imaging technologies, which have been evolving at the fast rate, finding their way into a growing number of uses and therefore expanding the term total addressable market. Our core technologies, both that we owned already and developed internally through licensing and for acquisitions, are all centered around infrared imaging technologies, allowing us to create significant differentiators in this fast growing market space. The outcome of that has been growth in our infrared components business, to be now 44% of our overall revenue in the last fiscal year, overtaking the legacy business of PMO or Precision-modded optics.

Speaker Change: This type of urban youth hardly existed before we began going down this path.

Speaker Change: The second change happening that the Navalbus has been amount infrared imaging technologies which have been evolving at the fast rate, finding their weight into a growing number of uses and therefore expanding the term total addressable market.

Speaker Change: Our court acknowledges both that we own already and developed internally through licensing and for acquisitions of all centres around infrared imaging technologies allowing us to create significant differentiators in this fast-growing market space.

Speaker Change: The outcome of that has been growth in our infrared components business, to be now 44% of our overall revenue in the last fiscal year, overtaking the legacy business of PMO or precision-wilded optics.

Sam Rubin: Both of those growth areas more than offset the drastic decline in that legacy precision-modded optics business that we've seen.

Speaker Change: Both of those growth areas was an offset the drastic decline in that legacy precision all the dot expressions that we see.

Sam Rubin: Today, at the conclusion of our fiscal 2024 year, we can see the positive outcomes of this shift and, more importantly, the exponential growth we are seeing coming as a result of that. We're seeing coming down the road as a result of that. For our investment in differentiating technologies, we have positioned ourselves as a leader in the field of intelligence. We've an exclusive license from the government to commercialise new materials developed at NREL, as well as our partnership with the Department of Defense, Defense Logistics Agency around replacing germanium in DOD applications. We not only are they go to partner for everyone looking to phase our germanium, but have also earned ourselves a seat at the table in some of the most important discussions and projects in the defense world.

Speaker Change: Today, it's a conclusion of our fiscal 2024 year. We can see the positive outcomes of this shift, and more importantly, the exponential growth we are seeing coming as a result of that.

Speaker Change: We're seeing coming down the boat as a result of that.

Speaker Change: Throughout our investment in differentiating technologies, we have positioned ourselves as a leader in the field of Israel.

Speaker Change: We've an exclusive license from the government to commercialize new materials developed at NRL. As well as our partnership with Department of Defense, Defense Logistics Agency.

Speaker Change: around replacing germanium in DOD applications. We not only are the go-to partner for everyone looking to face our germanium, but have also earned ourselves a seat at the table in some of the most important discussions and projects in the defense world.

Sam Rubin: And by the way, is it our defense sales or at the all-time highlight now? For example, in April, we announced a first design win of our new one of our new glass materials from NREL. In this program of record, we are the sole source for a key part of a new infrared imaging system, which we expect could bring revenues in tens of millions of dollars a year in production. Four years ago, we could only dream of being in such a position of not only being part of a key program, but also being the sole source for it.

Speaker Change: And by the way, our defence seals are at the all-time high, like now.

Speaker Change: For example, in April, we announced a first design win of our new glass materials from NRW.

Speaker Change: In this program of record, we are the sole source for a key part of a new infrared imaging system which we expect could bring revenues in tens of millions of dollars a year in production.

Speaker Change: 4 years ago we could only dream of being in such a position of not only being part of a key program but also being the sole source work.

Sam Rubin: This program, by the way, is a program of record, which means it is a line item in congressional budget and funded for several years into the future.

Speaker Change: This program by the way is program of record, which means it is a line item in congressional budget and funded for several years into the future.

Sam Rubin: and this is just one of multiple programs we have now. Exclusive Materials are winning us those programs in all of which we're soul-sourced due to our exclusivity, and naturally, since those are all defense programs, we're a bit limited in what we can share, but try to share as much as we can.

Speaker Change: And this is just one of multiple programs that we have now. Exclusive materials are winning us, those programs, in all of which we're so exhausted due to our work's Reservity.

Speaker Change: And naturally since those are all different programs we're a bit limited in what we can share first try to share as much as we can.

Sam Rubin: In addition to our investment in Materials as differentiating technologies, we also invested in the development of our camera technologies, as well as the important acquisition of the Vizemid Technologies a year ago, which fed into this. We've those new technologies, and further leveraging our unique materials and other differentiators, we have built over the last couple of years a portfolio of unique thermal cameras that have created a strong entry point for us into a system level product, and enable us to now curve out a market share in a market estimated to be $9 billion of term and growing rapidly.

Speaker Change: In addition to our investment in materials, as differentiating technologies, we also invested in development of our camera technologies. As well as the important acquisition of the Vismet technologies a year ago, which fed into this.

Speaker Change: We've those news new technologies and further leveraging our unique materials and other differentiators. We have built over the last couple of years a portfolio of unique thermal cameras.

Speaker Change: That have created a strong entry point for us into a system level product.

Speaker Change: And enable us to now curve out a market share in a market estimated to be $9 billion of a year and a year.

Sam Rubin: Our efforts in the camera business started with introducing Mantis, an innovative broadband or multispectral infrared camera that is a first of its kind and enabled purely by our unique materials for men of it. Mantis served as a perfect innovative product to draw attention to us as a new camera manufacturer, positioning us as an innovative entrant and open the door to important conversations with customers. As a result of that, we not only became a camera supplier, but started working with customers on their unique needs, leading to more products that are driven by the customer request and needed in the market.

Speaker Change: Our efforts in the camera business started with introducing mantis, an innovative board band or multi-spectoral infrared camera that is a first of its kind and enabled purely by our unique materials for men of us.

Speaker Change: Mantis served as a perfect innovative product to draw attention to us as a new cameraman-actura, positioning us as an innovative entrance and open the door to important conversations with customers.

Speaker Change: As a result of that, we not only became a camera supplier but started working with customers on their unique leads, leading to more products that are driven by the customer request and needed in the market.

Sam Rubin: This includes thermal cameras for harsh environments, high sensitivity cameras for unique applications such as gas detection, and most recently, sorry, camera system for inspecting and optimizing performance of furnaces in power plants, steel mills, paper mills, and more. We're especially proud of this new product because of its price tag of $30,000 per unit, representing better than which represents better than anything else. The transformations the company has gone through from selling lenses with ASBs of dollars or tens of dollars at best to now selling cameras and thousands or tens of thousands of dollars. This is significant, of course, for future growth of the company.

Speaker Change: This includes thermal cameras for harsh environments, high sensitivity cameras for unique applications such as gas detection and most recently sorry.

Speaker Change: Timber system for inspecting and optimizing performance.

Speaker Change: of furnaces in power plants, steel mills, paper mills, and more. We're specially proud of this new product because of its price tag of $30,000 per unit. Representing better than...

Speaker Change: is which represents better than anything else.

Speaker Change: The transformation the company has gone through, from selling lenses with ASP's of dollars of $10 of dollars at best, to denounce selling cameras in thousands of tens of thousands of dollars.

Speaker Change: This is significant of course for future growth of the company. As selling a hundred cameras at $30,000 each has a completely different mass there were top-lying growth than selling just lenses that go into those cameras.

Sam Rubin: As selling a hundred cameras at $30,000 each has a completely different mass to our top-line growth than selling just lenses that go into those cameras.

Sam Rubin: What used to be our pie of business model? Similar to the material's technology differentiator that has already landed us one program of record, our camera technologist differentiator has landed us the Lockheed Martin missile program. Under this program, Lightbulb's subsidiary Vizimate Technologies, which we acquired last year, is developing for Lockheed Martin a new camera system that would be part of a missile. System. Due to pressing needs from the customer, the U.S. Army, the program is now on a very accelerated time-light. Though it started only a year ago, we have already achieved ERWIVI qualification of our subsystem and can begin shipping units for flight tests, which we are going to do over the next few months.

Speaker Change: What used to be our pie of business model?

Speaker Change: Timmelot, a material technology differentiator, that has already landed us one program of record. Our camera technology differentiator has landed us the Lockheed Mart in this cell program.

Speaker Change: Under this program, Lightfast subsidiary Vizermite Technologies, which we acquired last year, is developing for Lockheed Martin, a new camera system that would be part of a missile system.

Speaker Change: Due to pressing needs from the customer, the U.S. Army, the program is now on a very accelerated timeline. Though it started only a year ago, we have already achieved a well-equal qualification of our subsystem.

Speaker Change: And can begin shipping units for flight tests, which we're going to do over the next few months.

Sam Rubin: The program is potentially transformative for Lightpuff. Not only is it exactly the type of business we were targeting in our new strategy, but the size of the opportunity can completely transform us. Plokid Martin wins against Rayfian, which they are competing against. We expect to be seeing revenues between 50 million to 100 million a year once in full production. Though we are in development, the progress of this project is so fast that Lockheed and the customer are already looking to start setting up for ERWIVI, low rate initial production next year, which is the last step before full production.

Speaker Change: The program is potentially transformative for light path, not only is it exactly the type of business we were targeting in our new strategy, but the size of the opportunity can completely transform us.

Speaker Change: Plokid Martin wins against Reyfian, which is their competing against. We expect to be seeing revenues between 50 million to 100 million a year, once in full production.

Speaker Change: Hello, we are still in development. The progress of this project is so fast that Lockheed and the customer already looking to start setting up for L-Rip. Low rate initial production. Next year.

Sam Rubin: For a company our size, 35 million dollars or so in revenue, a contract like this that could be 50 to 100 million dollars can completely transform us. And although there is a possibility that Lockheed will not win this against Rayfian, we know that this technology we developed is so transformative and important that the same customer is already integrating it into at least two additional programs. This technology, by the way, was developed by Vizemid prior to the acquisition and moved from R&D into program of record shortly after we acquired Vizemid for about three million dollars last summer.

Speaker Change: which is the last step before full production.

Speaker Change: For a company hour size, $35 billion of so in revenue, a contract like this that could be 50 to $100 million can completely transform us.

Speaker Change: And although there is a possibility that Lockheed will not win this against Drapion, we know that this technology we developed is so transformative and important that the same customer is already integrating it into a list to additional programs.

Speaker Change: This technology, by the way, was developed by Visamid, Toyota's acquisition and moves from power in the into program of record, shortly after we acquired Visamid for about $3 million last summer.

Sam Rubin: Another exciting development on the camera front is that we play on AI technology. AI technology is making an impact in many areas, and many customers and users are looking for ways to leverage some of those advancements in the technology for their own use case or application. One important area AI technology has evolved is, in Vizemid, is in Vizemid where neural networks can be trained to do many of the tasks that until now required a human operator. For example, inspecting items on a production line, identifying an object someone entering into a space such as an intruder or a drone, and so on.

Speaker Change: Another exciting development on the camera front is there will play on AI technology.

Speaker Change: AI Technology is making an impact in many areas and many customers and users are looking for ways to leverage some of those advancements.

Speaker Change: Institute of Technology for their own use case or application.

Speaker Change: One important area, AI technology has evolved, is envisioned.

Speaker Change: Well, your networks can be trained to do many of the tasks that until now required a human authorator. For example...

Speaker Change: Inpecting items on a production line, identifying an object or someone entering into a space such as an intruder or a drone and so on.

Sam Rubin: In fact, so much work has been done on applications for use of AI in Vizem that ideas and trained modules are abundant and growing rapidly. In conversations with customers, we learnt that the challenge is not so much what to do with an AI model, but rather how to do it. Currently, anyone wanting to implement an AI module in real life has one of two options. Using a virtual service such as AWS and other data or GPU centers or installing an Nvidia or equivalent GPU system. The first one using AWS or other online services requires streaming, which clogs the bandwidth, and in many times, facilities do not allow that due to cybersecurity constraints.

Speaker Change: In fact, so much work has been done on applications for use of AI and vision that ideas and trained modules are abundant and growing rapidly.

Speaker Change: In conversations with customers, we learnt that the challenge is not so much what to do with an AI model, but rather how to do it.

Speaker Change: Currently, anyone wanting to implement an AI module in real life has one of two options.

Speaker Change: Using your virtual service, such as AWS and other data or GPUs sentudes.

Speaker Change: or installing an Nvidia or equivalent GPU system.

Speaker Change: The first one using AWS or other online services requires streaming, which clogs the bandwidth and in many times facilities do not allow that to decipher security constraint.

Sam Rubin: Not to mention big delays and latency of the images. The second option, using an Nvidia GPU or so, requires use of a device such as the GPUs that has a very high power consumption and very high upfront costs, limiting its usefulness in most field applications. To overcome that, and to not only make it possible to implement AI in the camera, but also affordable in cost and power, total cost of ownership, we have integrated a powerful AI accelerator chip made by Israeli Halo into the camera. This AI chip can accept neural networks in standard formats, such as ONNX or TensorFlow or others, and runs those AI modules in the camera's video pipeline.

Speaker Change: Not to mention big delays and latency of their images.

Speaker Change: The second option, using an Nvidia GPU, also requires use of a device such as a GPU that has a very high power consumption and very high upfront cost.

Speaker Change: Limiting its usefulness in most field applications.

Speaker Change: To overcome that, and to not only make it possible to implement AI in the camera, but also affordable in cost and power totaled cost of ownership.

Speaker Change: We have integrated a powerful AI accelerator chip made by Israeli Halo.

Speaker Change: In through the camera.

Speaker Change: This AI chip can accept neural networks in standard formats, such as Owen and Max or TensorFlow or others.

Speaker Change: And one of those AI modules in the camera's video pipeline. It's a very low power consumption and almost no latency.

Sam Rubin: It's a very low power consumption and almost no latency, with high computational power of 26 TOPS, table operations per second. This offering of a so-called AI ready camera, if you would, has generated significant torque and interest in the industry, and we are now working with some very interesting projects and customers that have already advanced AI solutions and need a friendly hardware to implement it on.

Speaker Change: with high computational power of 26 top-to-to-alperations per second.

Speaker Change: This offering of a so-called AI-ready camera, if you would, has generated significant torque and interest in the industry.

Speaker Change: and we are now working with some very interesting projects and customers that have already advanced AI solutions and need a friendly hardware to implement it on.

Sam Rubin: Taking this approach of focusing only on the hardware and not developing an AI neural network ourselves is driven by two of our core values: focus and, in this case, focusing on what we are good at and letting our customers focus on what they are good at, and value creation. In this case, the value creation is making AI implementation easier for our customers.

Speaker Change: Taking this approach of focusing on the hardware and not developing an AI neural network ourselves is driven by two of our core values, focus and in this case focusing on what we are good and letting our customers focus on what they are good at.

Speaker Change: and Value Creation. In this case, the value creation is making AI implementation easier for our customers.

Sam Rubin: Okay, after talking about those two pillars of growth out of our known three pillars of growth, I'll give a quick update and overview about the third one, automotive. As those that follow us know, Light化 has been working with several tier 1 and tier 2s in the other world to develop and qualify thermal imaging solutions for use in ADAS. Though we were already on track to start delivering units to an OEM for a new car module, a new mandate set by the National Highway Traffic Safety Administration, Nitzer, has impacted that implementation negatively in the short term, but created a much bigger long-term opportunity.

Speaker Change: Ok, after talking about those two pillars of growth, out of our known three pillars of growth, I'll give a quick update and overview about the third one automotive.

Speaker Change: And those that follow us know, Lightfast has been working with several Tier 1 and Tier 2's in the Ottawa to develop and qualify further-limging solutions for using ADAS.

Speaker Change: Though we already, we were already on track to start delivering units to an OEM for a new car module, a new mandate set by National Highway Traffic Safety Administration, Nitzer.

Speaker Change: has impacted that implementation negatively in the short term, but created a much bigger long term opportunity.

Sam Rubin: According to the new rule, by 2029, all new cars should include an emergency braking system that can identify pedestrians in pitch dark conditions from a certain distance. To achieve that, it looks like thermal imaging is going to be adopted into all of those systems, which means a much, much larger addressable market than estimated at first, even though further out than we hoped at first. From our conversations in the industry, we believe the auto industry is going to use this time to develop a solution that will allow thermal cameras to be installed behind the windshield of the car.

Speaker Change: According to the new rule, by 2029 all new cards should include an emergency braking system that can identify pedestrians in pitch dark conditions for a certain distance.

Speaker Change: To achieve that, it looks like thermal imaging is going to be adopted into all of those systems.

Speaker Change: which means a much, much larger addressable market than estimated first even though further out than we hope that first.

Speaker Change: I think I'm gonna do it.

Speaker Change: Form our conversations in Zandestreet.

Speaker Change: We believe the auto industry is going to use this time to develop a solution that will allow verbal cameras to be installed behind the windshield of the car.

Sam Rubin: This, in turn, will significantly simplify some of the challenges faced today in terms of environment and location of the company of the camera in the car. Lightbulb has solutions for both scenarios: camera sitting inside the car or outside of behind the windshield, and we will continue to work on those with our car. The automotive opportunity is still very significant for us, though the timeline is shifted further prior to the now compared to our prior conversations. According to what we currently see, we will continue to ship lower volumes in the incoming couple of years and see volume shipments begin to ramp up in our fiscal 2027.

Speaker Change: This in turn will significantly simplify some of the challenges faced today in terms of environment and location of the company in the car.

Speaker Change: Lightbap has solutions for both scenarios, camera sitting inside the car or behind the wind, outside or behind the windshield.

Speaker Change: and we will continue to work on those with our customers.

Speaker Change: The automotive opportunity is still very significant for us. Those a timeline is shifted further prior to then.

Speaker Change: Ply has been our competitor, we'll find our conversations.

Speaker Change: According to what we currently see, we will continue to shift lower volumes of in the incoming couple of years and see volume shipments begin to ramp up in our fiscal 2027.

Albert Miranda: Okay, I will now turn this gold to CFO, Al Miranda. It will develop numbers in four four to four years. Go ahead now.

Speaker Change: Ok, I will now turn this call to see if I will move on to talk about numbers in 4-4-1-4 years. Go ahead, Adam.

Albert Miranda: Thank you, Sam. I would like to remind everyone that much of the information we are discussing during this call is also including our press release issued earlier today and will be included in the 10-K for the period. I encourage you to visit our website to access these documents. I will discuss some of the primary financial performance metrics and provide additional color on them to better assist investors in analyzing the company. On a consolidated basis, revenues for the fiscal 4th quarter were 8.6 million compared to 9.7 million in the year-ago period. Sales of infrared components were 3 million or 35 percent of the company consolidated revenue.

Adam: Thank you, Sam. I'd like to remind everyone that much of the information we're discussing during his call is also including our press release issued earlier today and will be included in the time carried for the period. I encourage you to visit our website.

Adam: to access these documents.

Speaker Change: I will discuss some of the primary financial performance metrics and provide additional color on them to better assist investors and analyze in the company.

Speaker Change: On a consolidated basis, revenue used for the fiscal fourth quarter or 8.6 million, compared to 9.7 million in the year ago period.

Speaker Change: Sales of Infrared Components for 3 million or 35% of the company consolidated revenue. Revenue from Disable Components was 32 million or 37% of consolidated revenue.

Albert Miranda: Revenue from visible components was 32 million, or 37 percent of consolidated revenue. Revenue from assemblies and modules were 1.4 million, or 16 percent. Revenue from engineering services was 1 million, or 12 percent. Infrared component sales decreased approximately 1.7 million or 36 percent, primarily due to decrease in sales against the large annual contract for germanium-based products, which was not renewed in the second quarter of fiscal year 2024. As we decided to reduce the amount of optics we produced from germanium, both to reduce our risk of supply chain disruption and, more importantly, to work with customers to convert their systems to use optics made of our black diamond materials.

Speaker Change: Revenue from Assemblies and Modules, where 1.4 million are 16%.

Speaker Change: Revenue from Engineering Services was 1 million or 12%.

Speaker Change: Infrared Component Sales decreased approximately 1.7 million or 36% primarily due to decrease in sales against the large annual contract for germanium-based products which was not renewed in the second quarter of fiscal year 2024.

Speaker Change: As we decided to reduce the amount of optics we produce from germanium. Both to reduce our risk of supply chain disruption, and more importantly to work with customers to convert their systems to use optics made of our black diamond materials.

Albert Miranda: Visible component sales were approximately 3.2 million, or flat in comparison to the same quarter of the prior fiscal year. By industry, there was a decrease in sales to defense customers due to timing of orders and an increase in sales through US catalog of distribution channels. Assemblies and modules revenue decreased approximately 0.2 million, or 14 percent. Primarily due to sales of a custom visible lens assembly to a medical customer for which we have an end-of-life order backlog going into fiscal 2025. In the fourth quarter of fiscal year 2023, this customer requested a greater number of units shipped.

Speaker Change: Visible components sales were approximately 3.2 million or flat in comparison to the same quarter of the prior fiscal year. By industry there was a decrease in sales to defense customers due to timing of orders and in increase in sales through US catalog of distribution channels.

Speaker Change: Assembly's modules, revenue, decreased approximately 0.2 million or 14%. Primarily due to sales of a custom visible lens assembly to a medical customer, for which we have an end-of-life order backlog going into fiscal 2025.

Speaker Change: and the fourth quarter of fiscal year 2023, this customer requested a greater number of units shipped, whereas in fiscal year 2024, we've shipped the lower of more consistent amount each quarter.

Albert Miranda: Whereas in fiscal year 2024, we shipped a lower but more consistent amount each quarter. This decrease was partially offset by the addition of busy med revenue. Engineering services increased approximately 0.9 million, or 698 percent. Primarily driven by busy med contract with law keep Morton where revenue is generally recognized based on the achievement of miles. Gross margin in the fourth quarter of fiscal 2024 was approximately 2.5 million, a decrease of 0.6 million or 18 percent as compared to the same quarter of the prior fiscal year. Total cost of sales was approximately 6.1 million for the fourth quarter of fiscal 2024, compared to approximately 6.6 million for the same quarter of the prior fiscal year.

Speaker Change: This, this, this decrease was partially offset by the addition of busy metal revenue.

Speaker Change: Engineering Services increased approximately .9 million or 698% primarily driven by Visimid contract with Lockheed Martin, where Revenue is generally recognized based on the achievement of milestones.

Speaker Change: Gross margin of the fourth quarter of fiscal 2024 was approximately 2.5 million a decrease of 0.6 million or 18 percent as compared to the same quarter of the prior fiscal year.

Speaker Change: Total cost of sales is approximately 6.1 million for the fourth quarter of fiscal 2024. Compared to approximately 6.6 million for the same quarter of the prior fiscal year.

Albert Miranda: Gross margin as a percentage of revenue was 29 percent for the fourth quarter of fiscal 2024, compared to 32 percent the same quarter of the prior fiscal year. The decrease in gross margin as a percentage of revenue is primarily due to the overall decrease in revenue, resulting in lower contribution to our fixed manufacturing costs. Sequentially, gross margin improved from 21 percent the third quarter of fiscal 2024 as we move past the inventory revaluation, which impacted that quarter. Selling general administrative costs were approximately 3.6 million for the fourth quarter of fiscal 2024, an increase of approximately 0.6 million, or 20 percent, as compared to the same quarter of the prior fiscal year.

Speaker Change: Gross Margin is a percentage of revenue is 29% for the fourth quarter of fiscal 2024 compared to 32% the same quarter of the prior fiscal year.

Speaker Change: The decrease in gross margin as a percentage of revenue is primarily due to the overall decrease in revenue resulting in lower contribution to our fixed manufacturing costs.

Speaker Change: See, eventually, gross margin improved from 21% to third quarter of fiscal 2024.

Speaker Change: As we move past the inventory of reevaluation, which impacted that quarter.

Speaker Change: Selling General Administrative Costs were approximately 3.6 million for the fourth quarter of fiscal 2024 and increase of approximately 0.6 million or 20% as compared to the same quarter of the prior fiscal year.

Albert Miranda: The increase in SG&A for the fourth quarter of fiscal 2024 is primarily due to an increase in wages, including non-recurring executive severance costs, and an increase in legal and consulting fees related to certain business development initiatives. We also incur additional legal and professional fees associated with the previously disclosed Delaware Chancery Court proceedings. That loss for the fourth quarter of fiscal 2024 was approximately 2.4 million, or 6 cents basic and diluted loss per share, compared to 0.8 million, or 2 cents basic and diluted loss per share for the same quarter of the prior fiscal year. The increase in net loss of approximately 1.5 million for the fourth quarter of fiscal 2024 as compared to the same quarter of the prior fiscal year was primarily attributable to the decrease in gross margin, coupled with increased operating expenses, including amortization of intangibles.

Speaker Change: The increase in SGNA for the fourth quarter of fiscal 2024 is primarily due to an increase in wages, including non-recurring an executive severance cost, and an increase in illegal consulting fees, related to certain business development initiatives.

Speaker Change: We also incur additional legal professional fees associated with the previously disclosed Delaware of the chance to record proceedings.

Speaker Change: That was for the fourth quarter of the school 2024 was approximately 2.4 million or 6 cents basic and diluted loss per share compared to 0.8 million or 2 cents basic and diluted loss per share for the same quarter of the prior fiscal year.

Speaker Change: The increase in net loss of approximately 1.5 million for the fourth quarter of fiscal 2024 as compared to the same quarter of the prior fiscal year was primarily attributable to the decrease in gross margin, coupled with increased operating expenses.

Albert Miranda: EBITDA for the quarter ended June 30, 2024, was a loss of approximately 1.3 million compared to income of 0.1 million for the same period of the prior fiscal year.

Speaker Change: and including amortization of intangibles.

Speaker Change: EBITDA for the quarter ended June 30, 2024, was a loss of approximately 1.3 million compared to income of 0.1 million for the same period of the prior fiscal year.

Albert Miranda: The decrease in EBITDA in the fourth quarter of fiscal year 2024 was primarily attributable to decrease in revenue and gross margin, coupled with increases in SG&A and other expenses, which were primarily related to non-recurring items. Turning to results for the year ended June 30, 2024, revenue for fiscal 2024 was 31.7 million, a decrease from 32.9 million in the prior fiscal year. Sales of infrared components were 14.1 million, or 44% of the company's consolidated revenue in the year ended June 30. Revenue from visible components was 11.2 million or 35% of the consolidated revenue. Revenue from assemblies and solutions or 4.5 million or 14% of total company revenue.

Speaker Change: The decrease in EBITDA in the fourth quarter of fiscal year 2024 was primarily attributable to decrease in revenue and gross margin coupled with increases as GNA and other expenses which were primarily related to non-recurring items.

Speaker Change: Turned to results for the year ended June 30th, 2024, revenue for fiscal 2024 was 31.7 million, a decrease from 32.9 million in the prior fiscal year.

Speaker Change: Sales of Infrared Components were a 14.1 million or 44% of the company's consolidated revenue in the year ended June 30.

Speaker Change: Revenue from Visible Components was 11.2 million, or 35% of the consolidated revenue.

Speaker Change: Revenue from Assembly Solutions, we're 4.5 million, or 14% of total company revenue. Revenue from Engineering Services is 2 million, or 6% of total company revenue.

Albert Miranda: Revenue for engineering services was 2 million, or 6% of total company revenue. and Fiscal 2024 infrared cells decreased 0.3 million or 2 percent. The decrease in revenue is related to the previously mentioned Germanium-based annual contract that was not renewed. During a fiscal year, this decrease was mostly offset by an increase in shipments against an annual contract for an international military program. This contract was renewed during the first quarter of fiscal 2024 for a higher dollar value than the previous contract. Visible component revenue decreased approximately $2.2 million or 16 percent. The decrease in revenue is primarily due to a decrease in sales to customers in the defense industry, as well as a decrease in sales through a catalog of distribution channels in the US and Europe.

Speaker Change: and Fiscal 2024, Infrared Cells.

Speaker Change: D.C. is 0.3 million or two percent. The D.C. in revenue is related to the previously mentioned germanium based annual contract that was not renewed.

Speaker Change: During the fiscal year, this decrease was mostly offset by an increase in shipments against an annual contract for an international military program. This contract was renewed during the first quarter of fiscal 2024 for a higher dollar value than the previous contract.

Speaker Change: Visible component revenue decreased approximately 2.2 million or 16%. The decrease in revenue is primarily due to decrease in sales to customers in the defense industry, as well as the decrease in sales through catalog and distribution channels in the US and Europe.

Albert Miranda: Sales to customers in the telecommunication industry in China also decreased. The assembly solutions revenue decreased approximately 0.2 million or 5 percent, primarily due to a decrease in shipments against a multi-year contract with a defense customer due to timing. As well as decreases in sales of infrared assemblies to industrial customers in both China and the US, both of which customers have been steadily decreasing orders since the peak of COVID-19. These decreases are partially offset by the addition of busy met revenue from sales of infrared tamer cores. Engineering services increased approximately 1.5 million, or 363 percent. This increase was primarily driven by busy met contract with Lockheed Martin for remaining increases driven by revenue from one of our space related funded research contracts.

Speaker Change: Sales to Cosmic and Telecommunication Industry in China also decreased.

Speaker Change: Assembly Solutions revenue decreased approximately 0.2 million or 5% primarily due to a decrease in shipments against the multi-year contract with a defense customer due to timing.

Speaker Change: As well as decreases in sales of infrared assemblies. Industrial customers in China and US, both of which customers have been steadily decreasing orders since the peak of COVID-19.

Speaker Change: These decreases are partially offset by the addition of busyment revenue from sales of infrared camera cores. Engineering services increased approximately 1.5 million or 363%.

Speaker Change: This increase was primarily driven by the Vizimeth's contract with Lockheed Martin. A remaining increase is driven by revenue from one of our space-related, funded research contracts.

Albert Miranda: S-GNA costs were approximately 12.3 million for the fiscal 2024, an increase of approximately 0.9 or 8 percent as compared to the prior fiscal year. The increase in S-GNA for fiscal 2024 is primarily due to an increase in wages, including non-recurring executive severance costs, and an increase in business development initiatives. These increases are partially offset by a decrease in stock-based compensation. We also incur additional legal and professional fees in fiscal 2024, associated with our rescheduled annual stockholder meeting and previously disclosed dollar chance for court proceedings. We expect S-GNA costs remain elevated for the next few quarters as we continue with certain business development initiatives.

Speaker Change: SGA costs were approximately 12.3 million for the fiscal 2024, and increase of approximately 0.9% or 8% as compared to the prior fiscal year.

Speaker Change: The increase in SGNA for fiscal 2024 is primarily due to increase in wages, including non-recurring executive severance costs, and an increase in business development initiatives.

Speaker Change: These increases are partially offset by a decrease in stock-based compensation. We also incur additional legal and professional fees in fiscal 2024 associated with our reschedule annual stockholder meeting and previously disclosed the Delaware tax-free court proceedings.

Speaker Change: We expect SGA costs remain elevated for the next few quarters, as we continue with certain business development initiatives.

Albert Miranda: Net loss for fiscal 2024 was approximately $8 million, or 21 cents basic and diluted loss per share, compared to approximately $4 million, or 13 cents basic and diluted loss per share for fiscal 2023. The increase in net loss for fiscal 2024, compared to fiscal 2023, is attributed to approximately 4.3 million increase in operating loss resulting from low revenue gross margin and increased operating expenses. Operating expenses included non-recurring S-GNA items previously mentioned, as well as increased new product development costs and 0.5 million increase in the amortization of intangibles. Resulting from the Fisimet acquisition. This operating loss increase was partially offset by a decrease in other expense, approximately 0.1 million, primarily due to the decrease in interest expense. In addition, there was a favorable difference of approximately 0.2 million in the provision for income taxes for fiscal 2024.

Speaker Change: In that loss for fiscal 2024, it was approximately 8 million, or 21 cents basic in the Looted Loss per share.

Speaker Change: Compared to approximately 4 million or 13 cents, basic and diluted loss per share for fiscal 2023.

Speaker Change: The increase in net loss for fiscal 2024 as compared to fiscal 2023 is attributed to approximately 4.3 million increase in operating loss resulting from low revenue gross margin and increased operating expenses.

Speaker Change: Operating expenses increases, including the non-recurring SGNOT A items previously mentioned.

Speaker Change: as well as increased new product built in my class.

Speaker Change: and 0.5 million increase in the amirization of intangible resulting from the FISI-MET acquisition. This operating loss increase was partially offset by a decrease in other expense, approximately 0.1 million.

Speaker Change: Primarily do the decrease in interest expense and addition, there was a favorable difference of approximately 0.2 million in the provision for income taxes for fiscal 2024.

Albert Miranda: EBITDA for fiscal 2024 was a loss of approximately 3.7 million compared to 0.4 million for the fiscal 2023. The decrease in EBITDA for fiscal 2024 is primarily attributable to lower revenue gross margin, coupled with increased operating expenses, including SG&A and new product development. As we mentioned, SG&A for fiscal 2024 includes a number of non-recurring items, particularly as related to business development initiatives. As of June 30, 2024, we had working capital of approximately 7.5 million in total cash and cash equivalence of approximately 3.5 million, on which less than 50% of our cash and cash equivalence are held by our foreign subsidiaries.

Speaker Change: Even though for fiscal 2024 was a loss of approximately 3.7 million, compared to 0.4 million for the fiscal 2023, the decrease in even if for fiscal 2024 is primarily attributable to low revenue gross market, coupled with increased operating expenses, including S-China and new product development.

Speaker Change: As we mentioned, SGNA for fiscal 2024 includes a number of non-recurrent items, particularly as related to business development initiatives.

Speaker Change: As of June 30th, 2024, we had working capital approximately 7.5 million in total cash and cash equivalents of approximately 3.5 million. Of which, less than 50% of our cash and cash equivalents are held by our foreign subsidiaries.

Albert Miranda: Cash provided by operations was approximately 0.5 million for fiscal 2024, compared to cash used in operations of approximately 2.8 million for the prior fiscal year. The increase in cash flow for operations during fiscal year 2024 is primarily due to decreases in accounts receivable in inventory, due to lower revenue in fiscal year 2024 as compared to fiscal year 2023. Capital expenditures were approximately 2.2 million for fiscal 2024, compared to approximately 3.1 million in the prior fiscal year. The company also expended approximately 0.9 million that of cash required to acquire a vision med during fiscal 2024. During fiscal year 2024 and 2023, our capital expenditures were primarily related to the expansion of the Orlando facility.

Speaker Change: Cash provided by operations was approximately 0.5 million for fiscal 2024 compared to cash used in operations in approximately 2.8 million for the prior fiscal year.

Speaker Change: The increase in cash flow for operations during fiscal year 2024 is primarily due.

Speaker Change: Cheek decreases in accounts receive home inventory due to low revenue and fiscal year 2024 as compared to fiscal year 2023. Capbo expenditure is approximately 2.2 million for fiscal 2024 compared to approximately 3.1 million in the prior fiscal year.

Speaker Change: the company also expended approximately 0.9 million that have cash required to acquire a vision made during fiscal 2024.

Speaker Change: During fiscal years 2024 and 2023, our capital expenditures were primarily related to the expansion of the Orlando facility.

Albert Miranda: In August 2023, we completed the construction of certain tenant improvements subject to our continuing lease for our Orlando facility, of which the landlord provided 2.5 million in tenant improvement allowances. We funded the balance of the tenant improvement costs of approximately 3.7 million for fiscal years 23 and 24. August, the company entered into a $3 million one-year note. The purpose of the note is for business development initiatives and CAPX, and excess of plan should we need it. I'll add more content on CAPX and cash in fiscal year 2025 in a minute. Our total backlog in June 30, 2024, was approximately 19.3 million, a decrease of 11% as compared to 21.7 million as in June 30, 2023. The decrease in backlog during fiscal 2024 is primarily due to shipments against the prior period backlog under several annual and multi-year contract renewals, the timing of which are not always consistent.

Speaker Change: In August 2023, we completed the construction of certain tenant improvements, subject to our continuing lease for our Lando facility, of which the landlord provided 2.5-minded tenant improvement allowances.

Speaker Change: We funded the balance of the tenant improvement cost of approximately 3.7 million or fiscal years 23 and 24.

Speaker Change: August, the company answered into a $3 million one-year note. The purpose of the note is for business development initiatives and catbacks. In excess of plan, should we need it? I had more content on catbacks and cash in fiscal year 2025 and a minute.

Speaker Change: I turned it back to August 23rd, 2024 was approximately 19.3 million, a decrease of 11% as compared to 21.7 million as a June 30th, 2023. The decrease in backlog during fiscal 2024.

Speaker Change: is primarily due to shipments against the prior period backlog of their several annual and multi-year contract rules, the timing of which are not always consistent.

Albert Miranda: In previous years, we typically received a significant contract renewal from our largest customer for infrared products made of germanium during the second fiscal quarter. However, as previously disclosed, we decided to reduce the amount of optics we produced from germanium, both to reduce our risk of supply chain disruption and, more importantly, to work with the customer to convert their systems to use optics made of our own black diamond materials. We continue to work with this customer as well as other customers. customers to convert their system to use black dye to the optics. The reduction in backlog as a result of the shipments during Fiscal 2024 was partially offset by a significant contract renewal for advanced infrared optics for a critical international military program and a significant contract awarded to Busy Med by Waukey Martin in December of 2023.

Speaker Change: In previous years, we typically receive this significant contract renewal from our largest customer for infrared products made of germanium during the second fiscal quarter.

Speaker Change: However, as previously disclosed, we decided to reduce the amount of optics we produced from germanium, both to reduce our risk of supply chain disruption and more importantly, to work with the customer to convert their systems to use a optics made of our own black diamond materials.

Speaker Change: The reduction in backlog as a result of the shipments during fiscal 2024 were partially offset by a significant contract renewal for advanced infrared optics for a critical international military program and a significant contract awarded to busy med by Wachie Martin in December of 2023.

Albert Miranda: I'd like to take one moment and put fiscal 2024 results in context. In fiscal 2024, we finally completed the alignment of the production facilities around the world. In China, we finished the consolidation of the business into one legal entity and merged two locations into an existing footprint, reducing our presence there in China. In Latvia, we continued the expansion of capabilities in particular coding and set the organization up for authorized work for NATO and the EU, authorized defense work. The US was far more ambitious in scale. Over the last 15 months, we consolidated the operations of the two legal entities, consolidated two buildings, increased the clean room by a factor of two, and also modernized it, prepping it for significant growth, with minimum future investments required.

Speaker Change: I'd like to take one moment and put fiscal 2024 results in context.

Speaker Change: In fiscal 2024, we finally completed the alignment of the production facilities around the world.

Speaker Change: and China, we've finished the consolidation of the business into one legal entity and merge two locations into an existing footprint.

Speaker Change: Reducing our presence there in China. In the last year, we continued expansion of capabilities in particular coding.

Speaker Change: And set the organization up for authorized work for NATO and the EU authorized defense work.

Speaker Change: The U.S. was far more ambitious than scale. Over the last 15 months, we consulted the operations of the two wheel antis.

Speaker Change: Consolidated two buildings increased the clean room by a factor of two and also modernized it, prepping it for significant growth with.

Albert Miranda: In addition, we restructured the organization to remove layers, removed complexity in reporting structures, and redeployed employees towards our growth areas. The restructuring of light path globally is a good accomplishment by itself. In 2024, we also acquired Vizemed, integrated it, and we're awarded the Lockheed Martin contract and have already reached flight milestone, a significant event now and for the future. All of these activities were executed very well. They do come with a cost, and you can see that in the net income and cash flow. They do come with a benefit. Our estimates are that we've removed roughly 1.2 million in structural costs that will be permanent going forward.

Speaker Change: Minimum Future Investments required. In addition, we restructured the organization to remove layers, removed complexity and reporting structures, and redeployed employees towards our growth areas.

Speaker Change: The restructuring of light path globally is a good accomplishment by itself.

Speaker Change: In 2024, we also acquired Vismet, integrated it, and we're awarded the Lockheed Martin Contract and have already reached the flight milestone.

Speaker Change: The Significant Event now and for the future.

Speaker Change: All of these activities were executed very well, they do come with a cost and you can see that in the net income and cash flow.

Speaker Change: They do come with the benefit, our estimates are that we've removed roughly 1.2 million in structural costs that will be permanent going forward.

Albert Miranda: I'm not pointing out all of this to give us some unrecognized credit for work, but rather to explain how this sets the stage for fiscal year 2025. The effort to fix problems of the past, build a world-class organization, are largely done. Going forward, we will not invest in CAPEX anywhere near the levels of the past two years. Now, our efforts will turn to growth. Sam mentioned all the potential opportunities in front of us. To capitalize on these opportunities, all of the resources of the company, people and cash will be geared towards business development initiatives, which includes sales, marketing, product development, and high-tech IR assemblies, amongst other things.

Speaker Change: I'm not pointing out all of this to give us some unrecognized credit for work. I'd rather explain how this sets the stage for fiscal year 2025.

Speaker Change: The effort to fix problems of the past, build a world-class organization are largely done.

Speaker Change: Going forward, we will not invest in topics anywhere near the levels of the past two years. Now, our efforts will turn too close.

Speaker Change: Sam mentioned all the potential opportunities in front of us.

Sam Rubin: to capitalize on these opportunities, all of the resources of the company.

Tash: People and Tash will be geared towards business development missions, which includes sales, marketing, product development, and high-tech IRS, and assemblies amongst other things.

Albert Miranda: The stage has been set in 2025. We have the potential and we have the ability to execute. It should be a very exciting. this year. I sincerely thank all of you for the support.

Sam Rubin: The stage has been set in 2025, we have the potential, and...

Sam Rubin: We had the ability to execute. It should be a very exciting year. I sincerely thank all of you for the support.

Operator: With this review over financial highlights, recent developments, and my editorial comments concluded, I'll now turn the call over to the operator to begin the question-and-answer session.

Speaker Change: With this review over financial highlights, recent developments and my editorial comments concluded I'm now turning to call over to the operator to begin the question and answer session.

Operator: Thank you.

Operator: We will now begin the question and answer session. To ask a question, you may first start in one on your telephone keypad, and if you are using a speaker phone, please pick up your hand side before pressing the key. If at any time your question has been addressed and you'd like to reach out to your questions, please press start in two.

Speaker Change: Thank you. We will now begin the question and answer session. To ask a question, you may press star minimum on your telephone key, but if you are using a speaker phone, please pick up your hand side before pressing the key.

Speaker Change: If at any time your question has been addressed and you'd like to withdraw your question please for a start, then too

Brian Kim Lickinger: The first question comes from Brian Kim Lickinger with Alliance Global Partners. Please go ahead.

Speaker Change: The first question comes from Ryan Kim's partner with Alliance Global Partners. Please go ahead.

Brian Kim Lickinger: Great. Thanks so much. Excuse me.

Ryan Kim: Great, thanks so much.

Sam Rubin: A lot of us information done past. Based on your backlog and your pipeline and a lot of things you've discussed, how should we think about 2000, fiscal 2000 and 25 in terms of revenue just from a high level? Do you expect a year of double-digit growth given this year was for this past year was depressed? How do you think about seasonality, and as your largest customer, I was unclear; have they been going to order black diamond optics? The first answer is that if you, we would take the low end of double-digit growth as our expectation for growth for the next fiscal year.

Chkanta: Chkanta, excuse me.

Speaker Change: A lot of information going back.

Speaker Change: Jason, your backlog and your pipeline and a lot of things you discuss. How should we think about 2000, fiscal 2025, in terms of revenue, just from a high-level? Do you expect a year of double-digit growth given this year's waste for this past year was depressed?

Speaker Change: How do you think about seasonality and as your largest customer I was unclear, have they begun to order black diamond optics?

Speaker Change: The first answer is that if you...

Speaker Change: We would take the low end of double-digit growth is our expectation for growth, for the next fiscal year.

Speaker Change: Welcome to the channel and I'll see you in the next video.

Sam Rubin: The largest customer has not started yet taking volume delivery of Black Diamond. It's still in the evaluation stage on the third side. We've delivered everything needed for that, but we expect them to be able to ramp up quickly once their decision is made.

Speaker Change: The largest chasmag has not started yet taking volume delivery of black diamond. It's still in the evaluation stage.

Speaker Change: on the outside, we've delivered everything needed for that, but we expect them to be able to ramp up quickly once the decision is paid.

Sam Rubin: Given the time, why you wanted it out then? We've thought of the reason for the decision was that, with the defense license in Europe, we feel and know that we can use the same capacity for more lucrative defense business in some cases. Moving away from germanium is not only because of germanium per se, but it's because when we're talking about a commercial customer like this gun site company, even when it's not germanium, when they're still comparing us to suppliers from Asia. In the defense business in Europe, once we have that license, we're competing against other European companies, and our cost basis in Latvia is very low compared to most European companies.

Speaker Change: Given you were the time when you were out there.

Speaker Change: Yeah, I mean, we've thought of the reason for the decision was that we've said defense license in Europe, we feel and know that we can use that same capacity for more lucrative defense business in some cases.

Speaker Change: and so moving away from Germanium is not only because of Germanium per se, but it's because when we're talking about the commercial customer like this gun-slate company, even when

Speaker Change: It's not your main year, but it's still being comparing us to suppliers from Asia, let's say.

Speaker Change: Where in the defense business in your work, once we have that license, we're competing against other European companies.

Speaker Change: And there were cost-bases and lots of VR is very of a low compared to most European companies.

Sam Rubin: So we want to leverage as much of the capacity as we can for defense business in Europe.

Speaker Change: So, we want to leverage as much of as capacity as we can for defense business in Europe.

Sam Rubin: I expect that even when this customer comes back, it would not be at the levels of what it was when the germanium was at full force, simply because we're starting to land in already new customers from same capacity that are honestly more lucrative and better for us. Brine, we can use the WAPI in facility for high-tard defense work in the US as well. And considering their cost position, there's not too many companies in the US that can go lower.

Speaker Change: I didn't expect that even when this customer comes back, it would not be at the levels of what it was when the Germanian

Speaker Change: was at full force, simply because we're starting to land in already new customers from think capacity that are honestly more lucrative and better for us.

Brian: And Brian, we can use the WAPI and facility for I-Tard Defense Work in the U.S. as well. And considering their cost position, there's not too many companies in the U.S. that can go lower.

Sam Rubin: And then you mentioned Raytheon is Lockheed's competitor for the new missile system. Assuming, like most procurements, there was a down-select process, and it started with more competitors. Have you received feedback yet, as far as Lockheed standing, and then when do you expect reasonably there might be an award, especially as we enter constant continuing resolutions, which are going to start right away? Yeah, so first of all, the down-select has already happened. The first round included more vendors. The army then chose to take a very unique approach, something that almost never gets done, and that is to fully fund Lockheed and Raytheon all the way to the end.

Speaker Change: And then you mentioned Raytheon is a lot of heat competitor for the new missile system. Assuming...

Speaker Change: Like most procurements, there was a down select process.

Speaker Change: and it started with more competitors. Have you received feedback yet? As far as Lockheed standing. And then when you expect reasonably, they're might be in a war, especially as we enter constant continuing resolutions, which are going to start right away.

Speaker Change: Yeah, so first wall the down select had already happened. The first round included more vendors.

Speaker Change: The Army then choned to take a very unique approach, something that almost never gets done, and that is to fully fund, lock-heed and evasion all the way to the end.

Sam Rubin: So, they are both fully funded to deliver missiles ready for point time. And that is simply because they really want to accelerate this, running out of missiles, if they haven't run out of them yet, and geopolitics, unfortunately, is not improving around the world. And so, this is all done on an accelerated course at which, by the end of it, both companies are going to have a ready product in the same time. We know that the Lockheed Martin solution is preferred on paper, since it provides significant advantages, which we cannot talk about. But the Raytheon is incumbent.

Speaker Change: So, they are both fully funded to deliver missiles ready for point time.

Speaker Change: And that is simply because they really want to accelerate this, running out of missiles that they haven't run out of them yet, and geopolitics unfortunately is not improving around the world.

Speaker Change: And so this is all done on an accelerated course, at which by the end of it both companies are going to have a ready product in the same time.

Speaker Change: We know that the Lockheed Martin solution is preferred on paper.

Speaker Change: since it provides significant advantages which we cannot talk about.

Sam Rubin: Raytheon designed and made their first generation single missile all these years, and is incumbent in this player. So, obviously, we have some built-in advantages, even though the technology of Lockheed, we believe, is far superior in this case.

Speaker Change: But the rapian has then come up, rapian designed and made the first generation single missile all these years and is, you know, then competent in this player. So obviously have some built-in advantages, even though the technology of Lockheed we believe is possible here in this game.

Sam Rubin: The earliest we expected the year from now, September or November 2025, as a possibility of a decision, as it stands right now. That's very helpful.

Speaker Change: The earliest we expected the year for now, September or November 2025, has a possibility of a decision.

Speaker Change: As a good stand, as it stands like this.

Brian Kim Lickinger: And then, you mentioned last quarter, and this quarter again, the second opportunity for an airborne system. It's sounded like it's a program of record, and I thought you have the design win, which I'm assuming means this is your program. If I have that, and you mentioned $10,000,000,000 of potential annual revenue. First of all, why is it potential if you've already won? You could just estimate it's difficult to understand, and when will production begin for this?

Speaker Change: That's very helpful. And then you mentioned last quarter in this quarter again, a second opportunity for an airborne system. It sounds like it's a program of record and I thought.

Speaker Change: You have the design win, which I'm assuming means this is your program. If I have that, and you mentioned 10 million dollars of potential annual revenue, first of all, why is it potential? It will be already won.

Speaker Change: He's just an estimates difficult to understand and when will production begin for this.

Sam Rubin: Well, potential is something my lawyer taught me to say in every sentence. So, he will beat me to death if I say anything definitive, but we are the sole source for the prime. It is building that system. That system is going to go on their patchy helicopters, by the way. We are already awarded building the prototypes for it, and we expect to deliver the first free prototypes in by the end of this calendar year, more or less, maybe beginning of next calendar year. At which point, if it goes well, we will immediately be awarded the Elevates, the Low Rate Initial Production.

Speaker Change: Well, potential is something my lawyer taught me to say in a sentence, so you will beat me to death if I say anything definitive.

Speaker Change: We are the sole source for the prime, it is building that system, that system is going to go on the patchy helicopters, by the way.

Speaker Change: We are already awarded buildings at prototypes for it, and we expect to deliver the first three prototypes in by the end of this calendar year, more or less, maybe beginning of next calendar year.

Speaker Change: At which point if it goes well we will immediately be awarded the Elements, the Low Rate Initial Production.

Sam Rubin: Right now, the award we have, similar to the Lockheed, is the award for the development effort.

Speaker Change: Right now, the award we have, similar to the Lockheed, is the award for the development effort. We don't have yet a contract or, you know, if we would, we obviously would. But does anyone else have a development award for prototypes or just you?

Sam Rubin: We don't have yet the contract, or, you know, if we would, we obviously would have. But does anyone else have a development award for prototypes, or just your team, just aside it? It's using Black Diamond Materials. Yeah, it's using the Zenovel materials to buy default wheels; it's sold. You can't. You can't get them anywhere else, Brian. That's it.

Speaker Change: And this is your team, Shmuel Rubin.

Speaker Change: It's using black diamond material. Yeah, it uses them of elementarials to be default wheel to sole tools. You can't get them anywhere else, Brian. That's it. Got it. My last question is...

Brian Kim Lickinger: Got it.

Brian Kim Lickinger: My last question is, you announced the launch of your new man-to-camera for greenhouse gas emissions. First of all, does that mean readily available for sale to all customers, or is it also still in prototyping or approval contact? I know you've put out the term, can you quantify the pipeline, say in the next 18 months, and how do you think about the sale cycle? Yeah. So, first of all, I thought we said it in the first release; if not, we should have emphasized. We have already shipped, so we have orders and started shipping to that. The term, or whatever, as a dressable market or serviceable market would be, I would say the price we're looking at is up to 30,000 per unit, and I think there's a reasonable amount of it to being in free digits units, so being 100 and 200 units a year. I'm not sure how fast we'll get there; I doubt it would be immediate.

Speaker Change: You announced the launch of your new Mantis camera for greenhouse gas emissions.

Speaker Change: Um...

Speaker Change: First of all, does that mean readily available for sale to all customers, or is it also still in prototyping or public contact?

Speaker Change: and then hopefully all of you, I wish you a good day.

Speaker Change: And then I know you've put out the term, can you quantify the pipeline saying the next 18 months and how do you think about the sales cycle? Yeah. So first of all, I thought we started in the first release, it's not we should have emphasized, we have already shipped, so we have orders and started shipping to that.

Speaker Change: The term or what our addressable market or serviceable market would be, I would say the price we're looking at is up to 30,000 per unit.

Speaker Change: And I think there's a reasonable amount of it to being in free digits units, so being a hundred and two hundred units a year. I'm not sure how fast we'll get there, I doubt it would be immediate.

Brian Kim Lickinger: I wish it would be, but they doubt it would be; but that sort of gives the range of where we think currently. And that's just based on existing market and technology. What we think and hope might happen is that we are enabling customers to do more with those cameras compared to other solutions in the market, in terms of optimization of the burners inside their furnaces and sites of power plants, and therefore the market size would grow. But by now I'd go with those numbers. And Brian, the other thing is, this is sort of like a standard product almost.

Speaker Change: I wish it would be that they dealt with the recipe, but that sort of gives the range of where we think currently.

Speaker Change: What we think, and that's just based on existing market and technology. What we think and hope might happen is that we are enabling customers to do more with those cameras compared to other solutions in the market.

Speaker Change: in terms of optimization of the burners inside the furnaces and site-to-power plants.

Speaker Change: and therefore the market sites will grow.

Speaker Change: but why now it's a good turn of snow.

Speaker Change: And Brian, the other thing is, this is sort of like a standard product almost. It is the application specific, but it is sort of a standard product which means we're actually building to forecast. So you don't, we're not going to see that back log anymore.

Brian Kim Lickinger: It is application specific, but it is sort of a standard product, which means we're actually building to forecast, so you don't, we're not going to see that backlog anymore. And so that's one of the things that we relied on backlog before, to sort of be very definitive in terms of what the future would look like. That's not really going to be the case for the gas detection cameras. And then for related cameras that, you know, sit in that same camera family.

Brian: And so that's one of the things that we relied on backwall before it would be very definitive in terms of what the future would look like.

Speaker Change: That's not really going to be the case.

Brian: For the gas detection cameras, and then for related cameras that sit in that same camera family.

Brian Kim Lickinger: Okay, thanks. I will. Thank you, Brian. She's the floor for others.

Speaker Change: Okay, thanks I will thank you for watching the floor for others.

Daisan Shreds: The next question comes with days on shreds with Lake Street, please go ahead. Hey guys, thanks for taking my questions. I just want to follow up on that last question on this next gen Mantis. I know it's more targeted for this specific end market, but just curious if some of the features on this new camera were things that your customers in that market were specifically asking for. I know kind of the previous Mantis version could have theoretically addressed this market, but just try and get a sense if there was kind of customer demand for kind of the features in this new one.

Speaker Change: The next question comes with a zoon shmelt with lake streep. Please go ahead.

Speaker Change: Hey guys, thanks for taking my questions. I just want to follow up on that last question on this next-gen mantis. I know it's more targeted for this specific ad market, but just serious if some of the features on this new camera were things that your customers in that market were specifically asking for. I know kind of the previous mantis version could have theoretically addressed this market, but just trying to get a sense if there was kind of customer demand for kind of the features in this new one.

Sam Rubin: No, yeah, you are absolutely right, and I think you hit it on the, at a very important spot. This version of Mantis came out of very detailed conversations with the customer. Some of them, because we just had the conversational customer, some of them because of the team we have now. Jaeson Messerschmitt joined us from Flair, along with a couple of other new recruits in the sales, business development, product management side, come with an extensive experience in the oil and gas industry. I mean, they know things I didn't even understand before, since it is possible. So, with their help, with these new team members that joined us all in the last few months, we've been able to fine-tune what we felt like is a great technology, Mantis, that from a pure technical point of view, could do an enormous amount of things.

Speaker Change: Now, you absolutely right, and I think you had it at a very important spot. This version of Mantis came out of very detailed conversations with the customers.

Speaker Change: Some of them, because we just had to say conversational customers, some of them, because of the team we have now.

Speaker Change: Jason Messerschmitt joined us from Flair along with a couple of other new recruits in the sales, business development, product management side, come within.

Jason Messerschmitt: Extensive experience in the oil and gas industry.

Jason Messerschmitt: I mean, they know things I didn't even understand before since it's our possible. So, with their help, with these new team members that joined us all in the last few months, we've been able to fine tune what we felt like.

Jason Messerschmitt: is a great technology meant that for a pure technical point of view could do an enormous amount of things.

Sam Rubin: They were able to take it and fine tune it and saying, okay, it's great we can do ABCD thing. Let's just focus it down on doing CO2, looking at the CO2 emissions in a furnace, switching between looking at the flames, looking at the heat distribution, things like that. In theory, it's the same mantis. Realistically, this is the application side now driving it, which honestly is where it should be.

Jason Messerschmitt: They were able to take it and find unit and saying, okay, it's very sweet can do ABCDG. Let's just focus it down on doing CO2. Looking at the CO2 emissions in a service.

Speaker Change: Switching between looking at the flames, they're looking at the heat distribution. Fint like that. In theory it's the same madness. Realistically this is the application side now driving it, which honestly is way it should be.

Daisan Shreds: Gotcha, that's really helpful.

Albert Miranda: And then just looking at OPEX, I know L, you mentioned taking 1.2 million of CO2 out in 2024, just curious how we should think about the new level of SG&A going forward. Yeah, so the efforts we did in 2024 to reduce our overall structural cost doesn't really fully kick in. It does now in Q1, but you know, we sort of changed things in Q3 with the restructuring and then in Q4. We did more activities around restructuring and reorganizing so that in Q1, we get the sort of full-year benefit. That being said, we are plowing money back into business development initiatives, so we're probably going to take that 1.2 million and structural cost reduction and spend it elsewhere.

Aldi: Gotcha. That's really helpful. And then just looking at topics, I know Aldi mentioned taking 1.2 million of costs out of, um, out in 2024, just curious how we should think about the new level of SGNA going forward.

Speaker Change: Yeah, so the efforts we did in 2024 to reduce our overall structural cost.

Speaker Change: It doesn't really fully kick in. It does now into one.

Speaker Change: Right.

Speaker Change: You know, we sort of changed things in Q3 with the restructuring and in Q4 we did.

Speaker Change: More activities around restructuring and reorganizing, so that in Q1 we get the sort of full year benefit. That being said, we are planning money back into business development initiatives.

Speaker Change: So we're probably going to take that 1.2 million and structural cost reduction and spend it elsewhere. Not for the entire year, but for some of the year, some of the things, I mean.

Albert Miranda: Not for the entire year, but for some of the year. Some of the things, I mean, your last question kind of dovetails into, you know, it's nice to have a nice camera, but you have to sell. So we're going to spend a tremendous amount of effort on that side. Okay, that makes sense.

Speaker Change #100: You're last question kind of dub tails into you know.

Speaker Change #100: It's nice to have a nice camera, but you have to sell, so we're going to spend a tremendous amount of effort on that side.

Sam Rubin: And then just the last one for me, and I'll jump back into Q. Looking at the auto opportunity, I know you mentioned or thermal imaging behind the windshield, but just at a high level, has the timetable that you guys are thinking about this opportunity changed? Or is it still kind of a couple of years in the future? Yes, I think because there's definitely a desire or goal of the industry to be behind the windshield, deliver is in the next year or two or going to be small in scale. So we were hoping, I think, we were expecting to be delivering already 20,000 units a year now and start scaling up to the hundreds of thousands for the key customer.

Speaker Change #101: Okay, that makes sense. And then just the last one for me, and I'll jump back into queue, looking at the auto-operative 2nd day, I know you mentioned or a thermal imaging behind the windshield, but just at a high level, has the time table that you guys are thinking about this opportunity change, or is it still kind of a couple of years in the future.

Speaker Change #102: Yes, I think because there's a...

Speaker Change #103: Definitely a desire like goal of the industry to be behind the windshield.

Speaker Change #104: Deliver it in the next year or two we're going to be small in scale.

Speaker Change #105: So we were hoping we were expecting to be delivering all of the 20,000 units a year now and start scaling up to the hundreds of thousands. We'll let's key customer.

Sam Rubin: It's not going to be in those numbers. We're going to be in the thousands of units, and that is simply because no one wants to go and implement it in the car in high volume in a configuration that's going to be very different than the configuration that the auto industry is going to adopt in 2028 or so. It's going to get familiar with firmware imaging, so to test it in low volumes, but the real volume will start once the windshield solution is developed, and that requires extensive work on the next two years by the auto industry on the windshield side, not on the firmware imaging side.

Speaker Change #105: It's not going to be in those knuckles. We're going to be in the thousands of units.

Speaker Change #105: And that is simply because no one wants to go and implement it in the car in high volume in a configuration that's going to be very different than the configuration that they're auto-industry of going to adopt in 2028 or so.

Speaker Change #106: And so the next two years we're going to see some volume that's going to be for new companies, new tier ones that we am.

Speaker Change #106: Starting to get familiar with thermal imaging, so to test it in low volumes.

Speaker Change #106: But the real volume will start once the windshield solution is developed and that requires extensive work on the next two years by the auto industry on the windshield side, not on the thermal electric side.

Sam Rubin: Okay, that's really helpful, Collar. Thanks a lot, guys. Okay, thank you.

Speaker Change #107: Okay, that's really helpful, color. Thanks a lot, guys.

Scott Buck: The next question comes with Scott Buck from H.C. Ringlar.

Speaker Change #108: Okay, thank you.

Speaker Change #108: The next question comes with Scott Burke from 8C RainWard. Please go ahead.

Scott Buck: Three, go ahead.

Scott Buck: Hi, good afternoon, guys. First, I want to follow up on one of Brian's questions, Sam. If a decision is made on the lucky missile program 12 months out or so, how quickly then does that matter? Is it going to move to production after that agreement or that decision is made? I mean, is that three months, is that six months? What is that process? Yeah, the conversation, that's still a bit up in the air. The conversations we're having are still indicating that we will be next calendar year setting up the infrastructure for production in Orlando. So that means that our part at least, I don't know about the rest of the, you know, parts that go into the lucky missiles that service us, but our part we could inferry start shipping within about three months after the decision is made.

Scott Burke: Hi, good afternoon, guys.

Scott Burke: First, I want to follow up on one of Brian's questions Sam, if a decision is made on the Lockheed Missile Program involved months out or so, how quickly then did that move to production after that agreement is?

Speaker Change #110: is a decision made. I mean, is that three months, is that six months? What is that process?

Speaker Change #111: Yeah, the conversation, that's still a bit up into air. The conversations we're having still indicating that we will be next calendar a year, setting up the infrastructure for production in Orlando.

Speaker Change #112: So that means that our part, at least, I don't know about the rest of the, you know, part that go into the lock in missiles at service, but our part, we could in theory start shipping within about three months after the decision is made.

Scott Buck: Okay, perfect. That's helpful.

Albert Miranda: And then out, given the shift in revenue with more coming from assemblies and engineering services, can you remind us how the gross margin dynamics work and how we should be thinking about things over the next 12 to 24 months of, you know, that ratio continues to move higher? So the margins on assemblies and modules are higher, higher than Light Path has had in the last, you know, two or three years that I've been here. So we should be, we should be, you know, for those products north of 40%.

Speaker Change #113: Okay, perfect, that's helpful.

Speaker Change #113: and then out.

Speaker Change #113: Given the shift in revenue, with more coming from assemblies and engineering services,

Speaker Change #114: Can you remind us how the gross margin dynamics work and how we should be thinking about things over the next 12 to 24 months, you know, that ratio continues to move higher.

Speaker Change #115: The margins on assembly's modules are higher, higher than white path paths had in the last two or three years that I've been here. So we should be, we should be, you know, for those products.

Albert Miranda: Okay, perfect. That's helpful.

Speaker Change #116: North of 40%.

Albert Miranda: And then last thing, I just want to ask about cash balance. You mentioned you took out the, what, three million dollar loan in August, kind of as insurance, but what do you need to run the business cash wise? Well, we're projecting being operating cash flow positive. So what we need is, whatever we decide to spend in catbacks above that, and any other, you know, business development initiatives that where you feel require cash investments. So that's helpful. Not, not huge amounts.

Speaker Change #117: Okay, perfect, that's helpful and then last thing I just want to ask about cash balance. You mentioned you took out the what 3 million dollar loan in August kind of as insurance, but generally what do you need to run the business cash was?

Speaker Change #118: Well, we're projecting being operating cash for a positive, so what we need is whatever we decide to spend in cat backs above that and any other business development initiatives that we feel require cash investments.

Albert Miranda: I tried to sort of say that, you know, that it's not big numbers anymore, like in the prior two years. He doesn't allow me to spend anything, is what he's saying. I appreciate the added color, guys. Thanks a lot. Thanks, Scott.

Speaker Change #119: So that's helpful. Not huge amounts. Try to sort of say that, you know, that it's not big numbers anymore. Like, in the prior two years, it doesn't allow me to spend anything because what he's saying.

Speaker Change #120: Hi, I appreciate the attic color guys. Thanks a lot.

Glenn Mattson: The next question comes with Glenn Mattson, with Lennonberg, Talman. Please go ahead. Yeah, just two quick ones for any of those things, been answered already, but just imagine that you could be setting up for over next year with Lockheed. Can you say, is there an expense related to that, or are you prepared for that, or is there anything you need to do to get ready for that?

Glenn Mazzon: The next question comes with Glenn Mazzon with Lenin Burke, Talman, please go ahead

Glenn Mazzon: Hi, I just think we're going through any of those things that have been answered already, but just imagine that you could be setting up for Albert next year with Lockheed, can you say is there a...

Glenn Mazzon: Ummm...

Speaker Change #122: Is there a expense related to that or are you prepared for that or is there anything you need to do to get ready for that? The money that went into the whole under facility was for that. So physically things structure the layout is there.

Albert Miranda: The money that went into the Orlando facility was for that. So, physically, the infrastructure layout is there. Specific equipment that would be needed kept in equipment; we still expected to be paid by the customer. Okay, great.

Speaker Change #123: Specific equipment that would be needed to capture equipment we still expect it to be paid by the customer.

Glenn Mattson: And then last for me, just curious about the AI, envision camera technology. You know, I guess in the UAV space, you see a lot of people who are looking to do, especially the fence side, the ability to navigate through vision systems and things, because they don't want to rely on networks that can be jammed and that kind of thing. So, is that, you know, there's a lot of growth in that space. I'm just curious, is that an area that it could be? Yeah, that is definitely, that's a very interesting area, you know, thing. It's definitely some companies we're in touch with, at least two, that do that and we know that.

Speaker Change #124: Okay, great. And then last for me, just to do curious about the AI, um...

Speaker Change #125: In Vision.

Speaker Change #125: Camera's Technology VEA.

Speaker Change #126: You know, I guess in the UAV space, you see a lot of people who are looking to do, especially in the fence side, there.

Speaker Change #126: Ability to navigate through vision systems and things because they don't want to rely on.

Speaker Change #126: Networks that can be jammed and that kind of thing so is that you know there's a lot of growth in that space and just curious is that

Speaker Change #127: An area that it could be a... Yeah, that is definitely a very interesting area, you know, I think it's definitely some companies when touch where at least two.

Sam Rubin: But most of the applications we think so far are much more basic first, as in target acquisition, pointing the drone in the right direction, tracking a target as it's moving, and so on.

Speaker Change #128: and we know that, but most of the applications we've seen so far are much more basic first as in target acquisition, pointing the drones of IT direction, tracking a target as it's moving and so on.

Glenn Mattson: Okay, that's it. Great, thanks.

Glenn Mattson: Okay, thank you.

Speaker Change #128: Okay, that's it, it's a great thing. Okay, thank you.

Aryan Hishman: The next question comes from Aryan Hishman with H, and that's my apartment. Please go ahead. Hi, how are you?

Speaker Change #128: The next question comes from Aryan Hishman with 18th summer apartments. Please go ahead.

Aryan Hishman: I'm Thornears from the AIG. In terms of the, I know you delivered the actual commercial, the commercial, you know, version, or pre-commercial version, to actually fire missiles and they've got to actually test real-life firing of missiles. Do you have any idea if that's commenced already? Is that something they're going to give you feedback? I assume they're going to give you feedback, at least on your portion, if it's involved in anything that they need to give you feedback. Yeah, hi, Ocean. I'm good to hear from you. I'll answer that as much as I can since we, you know, lucky doesn't competition with Arabian, so I need to assume that, you know, whatever I say can be heard by anyone, really.

Aryan Hishman: Hi, how are you, torners from the IG?

Speaker Change #130: In terms of this, I know you delivered the actual commercial, the commercial.

Speaker Change #131: Burgeon or pre-commercial version to actually fire missiles and they've got actually pest real life firing a missile.

Speaker Change #132: Do you have any idea if that commenced already? Is that something they're going to give you feedback? I assume they're going to give you feedback, and at least on your portion if it's involved in anything that they need to give you feedback.

Speaker Change #133: Hi, all, and good to hear from you. I'll answer that as much as I can, since we, you know...

Speaker Change #134: Located in competition with rapians, I need to assume that, you know, what I say can be heard by anyone of L.A. We achieved a worthy certification, meaning that the units can go and miss them.

Sam Rubin: We achieved a worthy certification, meaning that the units can go on missiles. In the next few months, we're going to start shipping units that will physically go on missiles. Once they do and they start flying, definitely, we're going to be receiving a lot of feedback. I mean, it's a very, very intimate workflow between our group and Lockheed, down to, you know, almost as if they're working in one company altogether. I mean, it's just a lot of back-and-forth there. So there'll be a lot of tweaking and work done once we start firing and seeing flights.

Speaker Change #134: In the next few months we're going to start shipping units that will physically go on this time.

Speaker Change #134: Once they do and they start flying, definitely we're going to be receiving a lot of feedback.

Speaker Change #135: I mean, it's a very, very intimate workflow between our groups and lucky down to, you know, almost as if they're working in one company altogether. I mean, it's just a lot of back and forth there.

Speaker Change #135: So there'll be a lot of tweaking and worked on once we start firing and seen flight data.

Sam Rubin: How is it logically possible, though? I think there's going to go through a lot of flight testing and debugging, and et cetera. How would it be possible that they can really get into production where they have to, you have to be ready for production in 25? Let me say a bit this way. These are people that have been doing this for many, many years and have a lot of trips, trick and treat trips up their sleeve that they can do, and an enormous amount of existing data that they based this on in simulation. So you'd be amazed, but it's not as if they're going to be firing physically thousands of missiles to collect the data and optimize this.

Speaker Change #135: How is it? How is it?

Speaker Change #136: I'm going to go through a lot of flight testing and debugging and such a how would be possible that they can really get into production where they have to be ready for production in 25. Let's do it. Let me say it's way these are people that have been doing this for many years.

Speaker Change #136: and have a lot of trips, trick and treat, to a subsurface leave that they can do. And an enormous amount of existing data that they based on and simulation.

Speaker Change #137: You'd be amazed, but it's not as if they're going to be firing physically thousands of missiles to collect the data and optimize it.

Sam Rubin: There's some very, very sophisticated systems that these companies have built over the years that are used for this. Is there a significant number of deliverables that you have to do in the coming few months? Every week, pretty much. We can't share a lot of them, but the program is very intense in its thing. I mean, in general, we're in the next few months or looking at shipping over 100 flight units. Does that extent? But there's many, many deliverables along the way of many different aspects of this. I mean, I know you've alluded to an ASP, but that's a lot of millions of dollars if I'm correct on that.

Speaker Change #137: There's some very, very sophisticated systems that these companies have built over the years that are used to this.

Speaker Change #138: Is there a significant number of deliverables that you have to do in the coming few months?

Speaker Change #139: Every week, pretty much. We can't share a lot of them, but the program is in.

Speaker Change #140: You know...

Speaker Change #140: is very intense in its thing. I mean, in general, we're in the next few months or looking at shipping over 100 flight units.

Speaker Change #141: Is that extent?

Speaker Change #142: But there are many, many digital circles along the way of many different aspects of this.

Speaker Change #143: I mean, I know you've alluded to an ASP, but that's a lot of millions of dollars.

Sam Rubin: Yeah, I mean, you can even just go and look at the federal budgets and can see that. But if you look at the single Gen 1 and that they built over 105,000 of them, I think, and the unit price of those missiles is six digits. I think just for your portion of the build, if you alluded to 100 units, there's a lot of money. I think it's the dollars for the flight path, if I'm not incorrect. Well, that's part of the NLE, the 7.5 million that we talked about. Yeah, definitely. We're doing quite a bit of business.

Speaker Change #143: I think I'll be right on that.

Speaker Change #144: Yeah, I mean you can even just go and look at the federal budgets and can see that. But if you look at the single-gen one and they built over 105,000 of them I think, and unit five stores, those missiles is six digits.

Speaker Change #145: So I'm saying just just for your portion of the build.

Speaker Change #145: If you move it to 100 units, a lot of money, I think it's $1,000 for there.

Speaker Change #146: My dad from that incorrect. Well, that's part of that NLE that's seven and a half million that we've talked about and you know that definitely we're doing quite a bit of business with Lockheed now.

Sam Rubin: We're lucky now.

Sam Rubin: Last question for me, is that for an infrared camera? That's an interesting point. We started focusing only on infrared cameras. Again, I strongly believe in focus. We can't spread too thin. We're not a large company. We can't do too many things. But what we've seen is, at the moment, we started talking about that we're having a lot of conversations. People are asking also for visible. So the company we're working with in Israel, Maoist Technology, which is a great partner to have. And we're doing incredible things together, has actually developed a version that allows us to feed two cameras in.

Speaker Change #146: Duh.

Speaker Change #147: The last question for me is the um...

Speaker Change #147: 2 using AI is that for an infrared camera, just being a camera.

Speaker Change #148: So, that's an interesting point. We started focusing only on inferred cameras. Again, I strongly believe in focus, right? So, we can't spread too thin, we're not a large company, we can't do too many things.

Speaker Change #148: But what we've seen is that at the moment we started talking about that we're having a lot of conversations with people asking also for visible.

Speaker Change #148: So, the company we're working with in Israel, my Western technology, which is a great partner to have and we're, you know, doing incredible things together, has actually developed a version that allows us to feed two cameras in.

Sam Rubin: So, in theory, we can make any of our systems into a dual camera that would be both visible and infrared. Again, I'm very, very cautious. We can't spread our R&D money and development too thin. So, once we start generating real revenue from there, we can look at next steps and adding more versions or more capabilities.

Speaker Change #148: So, in theory, we can make any of our systems into a dual camera that would be both visible and infrared.

Speaker Change #148: Again, I'm very, very cautious. We can't spread out our own de-money and development too thin. So once we start generating real revenue from there, we can look at next steps and adding more versions of more capabilities.

Sam Rubin: Part of this question, and one of the tasks that I can even be in a public forum like this call, is the security camera business for high-end security cameras with a lot of intelligence in the AI intelligence is just booming. And everybody wants more and more intelligence at the edge for the reasons that you have outlined in the call. I have not heard, and here's where I need your insights and what's really going on in the development of the whole industry. Does anybody have an infrared camera? Yeah, so actually you're touching on exactly what our most of our activities right now with our AI or HIL cameras are around that intruder detection, detection of perimeter security, and so on.

Speaker Change #149: Part of this question in one of the tasks that I gave me in a public forum like this.

Speaker Change #150: is the security camera business for high-end security cameras with a lot of intelligence.

Speaker Change #151: I think AI intelligence is just booming. To reporters as evidence by Motorola's business is just booming.

Speaker Change #152: and everybody wants more and more intelligence at the edge of the reason to y'all outlined the call. I have not heard and here's the word, I need urine sites and what's really going on in the...

Speaker Change #153: The development of the whole industry does anybody have an infrared camera?

Speaker Change #154: Let's go.

Speaker Change #155: So actually you're touching on exactly what our most of our activities right now with our AI or HAL cameras.

Speaker Change #156: All about that, in true detection, detection of perimeter security and so on. The couple of players there.

Sam Rubin: There are a couple of players there, but again there's just so many companies that are wrongfully relying right now on streaming and on using online computational services. And we're hearing that once they go out to the field, they're infinitely surprised because no one in the significant infrastructure facility will let you connect a system to the internet and connect to the street. So this is actually where we're playing.

Speaker Change #156: But again, there's just so many companies that are one-fully relying right now on streaming and on using online computational services.

Speaker Change #156: and we're hearing that once they go out to the fields they're infernastic surprise because no one in a significant infrastructure facility will let you connect a system to the internet and the reality of the stream. So did I think it was exactly where we're playing?

Sam Rubin: So my question is that is a very specialized market that dominated a few other players. And I guess my question is don't need to get into a major player where you can demo. Basically, you're doing like you were expertise in terms of the infrared capability and fully packaged assembly and the AI as well. Although there are a few players have their own AI. Let me think of it. You really want to be OEM into a Motorola and let the goal. That's exactly where we want to be. So we're working on two fronts. One front is working with OEMs like Motorola and such for them to buy the camera for us and integrate it.

Speaker Change #157: So, I'd like to ask you a question on the wisdom.

Speaker Change #158: That is a very specialized market dominated by more than a few other players.

Speaker Change #159: And I guess my questions don't be to get into a major player where you can demo.

Speaker Change #160: Basically, you're doing like you always say you're expertise in terms of the infrared, capable of the capability and fully packaged assembly, and the API as well, although there are a few players have their own AI.

Speaker Change #161: is what made me think of it.

Speaker Change #162: I hope you really want to be OEM into Motorola and that's the goal. That's actually where we want to be. So we're working on two fronts. One front is working with OEMs like Motorola and such for them to buy the camera for us and integrate it.

Sam Rubin: And the other front is what we call a software ecosystem where we're developing a portfolio of, say, partner companies that have focused only on the software. And we know that they have currently huge challenges going out and actually selling the product in the field. And we're working with them to make the software, the AI that they developed, compatible into our camera so that it can make it much easier for customers to use their software in. So two fronts in parallel.

Speaker Change #162: and the other front is what we call a software ecosystem, where we're developing a portfolio of say-partner companies that have focused only on the software, and we know that they have currently huge challenges going out and actually selling the product in the field.

Speaker Change #162: and we're working with them to make the software the AI that they developed, compatible in our camera so that it can make it much easier for customers to use their software. So, two fronts in parallel.

Sam Rubin: Very good. Thank you so much. Thank you all, and good hearing from you.

Speaker Change #163: Very good, this thing's so much

Operator: This concludes the question and answer session.

Speaker Change #164: Thank you all and good to hearing you from you.

Albert Miranda: I would like to turn the conference back over to management for any closing remarks. Thank you, everyone, for taking the time to follow up on Light Path. I'd like again to thank our employees and all stakeholders. The last four years have been quite a bit going on with many, many different things we had to do, but we're there now. We have some incredible opportunities that we won and continue to win thanks to the hard work of the team. We have the future ahead of us, and we're pretty much done with most of the cleanup, so we can really focus now on the future and don't grow.

Speaker Change #165: This concludes the question and answer session. I would like to turn the conference back over to management for any closer remarks.

Speaker Change #166: Thank you everyone for taking the time to follow up from Lightbath. I'd like again to thank our employees and those stakeholders. The last four years have been quite a bit going on with many different things we had to do, but we're there now.

Speaker Change #166: We have some incredible opportunities that we want and continue to win. Thanks to the hard work of the team. We have the future ahead of us and we're pretty much done with most of the clean up. So we can really focus now on the future and don't go.

Albert Miranda: I look forward to hearing everyone in future calls, and as always, I'm available directly on the website or in any other way for anyone that needs any questions.

Speaker Change #166: I look forward to hearing everyone in future calls and as always I'm available directly on the website or in any other way from anyone the details and questions.

Operator: Thank you and good night.

Speaker Change #166: Thank you and good night.

Operator: The conference has now concluded.

Operator: Thank you for attending today's presentation.

Speaker Change #167: The conference has now concluded, thank you for attending today's presentation. You may now disconnect.

Operator: You may now disconnect.

Speaker Change #168: Music Music

Speaker Change #168: [inaudible]

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