Q3 2025 LightPath Technologies Inc Earnings Call

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Operator: © BF-WATCH TV 2021 Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Lightpth Technology's 3rd Quarter Fiscal 2025 Earnings Conference Call. During today's presentation, all parties will be in listen only. Following the presentation, the conference will be opened for questions. This conference is being recorded today, May 15, 2025, and the Earnings Press release accompanying this conference call was issued after the market closed today.

Good afternoon, ladies and gentlemen, thank you for standing by won't come to light pulse Technology's third quarter fiscal 'twenty earnings Conference call.

During today's presentation.

It will be in listen only mode.

Following the presentation the conference will be opened for questions.

The conference is being recorded today May 15, 20 cities tonic.

The earnings press release accompanying this conference call.

Issued after the market close today.

Operator: I'd like to remind you that during the course of this conference call, the company will be making a number of forward-looking studies. at a base. and Uncertainties at Work. Although the company believes that the assumptions underlining these statements are And there could be no assurances that the projected results would be real. In addition, references made may be made to certain financial measures that are in accordance with the General Accepted Account. We refer to these as non-gap financial measures.

I'd like to remind you that during the course of this conference call. The company will be making a number of posted your statements that are based on current expectations involve various risks and uncertainties as discussed at least periodic SEC filings.

Although the company believes that the assumptions underlying these patents are reasonable.

Hilton can be confusing to be inaccurate and there could be no assurances that the projected result, with the realized.

In addition references made maybe major teaching a national niches that are not in accordance with general accepted accounting principles. Okay.

What do you say to these non-GAAP financial measures.

Operator: Please refer to our SEC reports in certain of these press which include reconciliations of non-gap financial measures and associated CEO, Sam Rubin will begin today's call with Sir and a strategic overview of a and recent development. Wall Seef, O.L. Marinda. will be in review for next release.

Please refer to our SEC reports in search and all of these press releases such as Oh press releases, which include reconciliations of non-GAAP financial measures.

So the shape of disclaimers.

Speaker Change: T O San Britain will be keen to high school decision.

Yeah.

With a strategic overview of the business.

Speaker Change: And recent dip out of things off the company.

Speaker Change: Well, Steve Elder Linda.

Speaker Change: He will then review financial results for the quarter.

Operator: Following the prepared remarks, there will be a formal question and answer session.

Speaker Change: Following their remarks, we will be a fool Krishna answer session.

Sam Rubin: I will now turn the conference over to CEO Sam Rubin. Thank you, operator. Good afternoon to everyone and welcome to Lightpth Technology's third quarter fiscal 2025 financial results conference call. The third quarter of 2025 demonstrated our continued transformation from a pure component supplier to a vertically integrated global solution provider for infrared imaging technologies for defense and commercial applications. The quarter was highlighted by the close of our acquisition of G5 Infrared, incremental camera product launches, exciting progress on key defense contracts and ongoing growth driven by geopolitical tensions, and these incremental product line launches. As a reminder, up until about five years, four years ago.

Sam Rubin: I will not turn the conference over to see Sam Rubin.

Sam Rubin: That's the least yours. Please go ahead.

Thank you operator, and good afternoon to everyone and welcome to the lifestyle College's third quarter fiscal 2025 financial results Conference call.

Sam Rubin: The first quarter of 2025 demonstrated our continued transformation from a pure component supplier to a vertically integrated global solution provider for infrared imaging technologies for defense and commercial applications.

Sam Rubin: The quarter was highlighted by the close of our acquisition of <unk> five into it incremental camera product launches.

Sam Rubin: <unk> progress on key defense contracts and ongoing growth driven by geopolitical tension and these incremental product line launches.

Sam Rubin: As a reminder, up until about five years four years ago.

Sam Rubin: Lightpth was a pure play optical component manufacturer. The core technology of lightbulb up until that point, precision glass molding, was an innovative technology that was leading the way in early 2000s. However, gradually became commercialized and consequently commoditized over the last 20 years. What was the leading differentiator for the company years ago had become, by 2020, a widely deployed technology with aggressive and ample competition, pushing Lightpath out of the market and crippling any growth prospects.

Sam Rubin: POS was a pure play optical components manufacturer.

Sam Rubin: The core technology of light pop up until that point precision glass molding, what's an innovative technology that was leading the way in early 2000.

Sam Rubin: But gradually became commercialized and concern and consequently, commoditize over the last 20 years.

Sam Rubin: What what's the leading differentiator for the company years ago has become by 2020 at widely deployed technology with aggressive and ample competition.

Sam Rubin: Pushing late fall out of the market and crippling any growth prospects.

Sam Rubin: Okay.

Sam Rubin: In late 2020, shortly after I joined, we outlined a new strategy that leverages our differentiators into a more value-added position, with the goal to eventually become a solutions and subsystem provider. All of which is still in the optics space, where we have a strong domain expertise with the ultimate goal of becoming a systems supplier. We started that journey by first offering optical assemblies based on our optical components. then began to offer compact thermal cameras, such as our uncooled Mantis multispectral camera. And later on, through the acquisition of Bismuth Technologies in the summer of 2023, we added advanced capabilities in video engine and camera cores for uncooled infrared cameras and optical gas imaging technology.

Sam Rubin: In late 'twenty 'twenty shortly after I joined we outlined a new strategy that leverages, our differentiate us into a more value added position with the goal to eventually become a solutions and sub system provider.

Sam Rubin: All of which is still in the optics space, where we have a strong domain expertise with the ultimate goal of becoming a systems supplier.

Sam Rubin: We started the journey by first offering optical assembly based on our optical components.

Sam Rubin: <unk> begun to affect compact thermal cameras, such is that what I'm called Mantas multi spectral camera.

Sam Rubin: In late two O foods acquisition of visit with technologists in the summer of 2020 free we ended the advanced capabilities in video engine and camera cores for uncalled for cameras and optical gas imaging technology.

Sam Rubin: And now, most recently, the acquisition of G5 Infrared, which added a product line of cooled infrared cameras for long-range images. These acquisitions and organic investment in R&D and new product design have led to significant growth of LightPath in these new categories of cameras, assemblies, and subsystems. What just a few years ago was a small part of the company that mainly did optical components has now become the majority of our business. At this point in time, the new direction we have taken, which includes optical assemblies, cooled and uncooled cameras, and other subsystems, is becoming roughly 50% of our revenue, with the other half of the revenue being optical components.

Sam Rubin: And now most recently the acquisition of G. Five infrared, which added a product line of cooled infrared cameras for long range imaging.

Sam Rubin: These acquisition and organic investment in R&D and the new product design have led to significant growth of lifestyles and these new categories of cameras assemblies and sub systems.

Sam Rubin: What is it just a few years ago with a small part of the company. That's mainly the optical component has now becomes the majority of our business at.

Sam Rubin: At this point in time, the new direction, we have taken which include optical assemblies Colton uncalled cameras and other sub systems.

Sam Rubin: Becoming a roughly 50% of that revenue, whereas the other half of the revenue being optical components.

Sam Rubin: And with ASBs, that's average sale prices of those products being naturally higher than the component business, we expect this ratio to continue to grow. These numbers, by the way, match our past predictions, which we discussed publicly in the past, of the product mix we estimated to achieve when we started the transition. With this move up the food chain comes, of course, more complex products and systems, and with them higher value and larger projects, oftentimes with very significant upside potential. These opportunities are not specific to one product or another, and at this point span across our entire vertical array of products and offering, including some large projects on the material side, optical assemblies, cooled cameras, and uncooled cameras.

Sam Rubin: And with Asp's, that's average sales prices of those products being naturally higher than the components business. We expect this ratio to continue to grow.

Sam Rubin: These numbers by the way my match, our tough predictions, which we discussed publicly in the past well the product mix, we exit estimated to achieve when we started the transition.

Sam Rubin: We've just moved up the food chain comes of course, more complex products and systems and with them higher value and larger projects.

Sam Rubin: Oftentimes with very significant upside potential.

Sam Rubin: These opportunities are not specific to one product to another.

Sam Rubin: And at this point span of course, I wouldn't tie up vertical array of products and offerings, including some large projects on the material side optical assemblies cooled cameras and uncle cameras.

Sam Rubin: In prior calls and investor presentations, we would often spend time discussing one or two specific projects. However, at this point, the number of such large potential projects we have makes it not practical to discuss each one of them in great detail. Not to mention that due to their nature, oftentimes being defense programs, we're actually restricted at times from discussing in as much detail as we would like.

Sam Rubin: In prior calls and Investor presentations, we would often spend time discussing with one or two specific projects.

Sam Rubin: However at this point the number of such large potential projects. We have it makes it's not practical to discuss each one of them in great detail.

Sam Rubin: Not to mention that due to their nature oftentimes being defense programs, we actually restrict at times from discussing in as much detail as we.

Sam Rubin: We would like to.

Sam Rubin: Nevertheless, in order to continue to provide as much visibility as possible, I will provide a quick update on the various projects. First, the NGSRI program with Lockheed. NGSRI stands for Next-Generation Short-Range Interceptor, or the replacement for the Stinger missile. This is our largest revenue opportunity and is progressing to plan. As has been publicly disclosed, this is a competitive bid against a solution developed by Wayfair. And due to the nature of the competitive bid, we are actually very limited in what we can provide in terms of information, performance and results. Other than the fact that we are progressing according to plan and are very pleased with this project.

Sam Rubin: Nevertheless in order to continue to provide as much visibility as possible I will provide a quick update on the various support you.

Sam Rubin: First is the N G SIFI program with Lockheed and she has some ice stands for next generation short-range interceptor or the replacement for the single best site.

Sam Rubin: This is our largest revenue opportunity and is progressing to plan.

Sam Rubin: Has it been publicly disclose this as a competitive bid against a solutions solution developed by Vivian.

Sam Rubin: And due to the nature of the competitive bid we are actually very limited in what we can provide in terms of information performance and results.

Sam Rubin: Other than the fact that we are progressing according to plan and are very pleased with this project.

Sam Rubin: The NGSRI is a camera program and is run out of our Vizimed group in Texas. The G5 group in New Hampshire also has a few large projects. Chief among them is the SPIR program. SPIR stands for Shipboard Panoramic Electro-Optic Infrared. In this program, we are providing L3Harris with advanced infrared cameras that will be mounted on all naval surface vessels. for Passive Detection of Threats in the Area such as Detecting Unmanned Vessels and Drones. Many times you guys would hear this as CUAS or counter UAV. Our G5 group also has some additional large programs in border security, other county UAS, and more.

Speaker Change: <unk> is a camera program and it's one that our Vincent made group in Texas.

Speaker Change: The G. Five group in New Hampshire also has a few large projects chief among them is the spirit program spear stands for ship board kind of electro optic infill that system.

Speaker Change: In this program, we are providing els, we have as we've advanced infrared cameras that would be mounted on all naval surface vessels for passenger detection of threats in the area such as detecting an unmanned vessels that controls. Many times you guys would hit it is.

Speaker Change: UAS counter UAV system.

Speaker Change: Our <unk> group also has some additional large programs in border security other counter UAS and.

Sam Rubin: We believe G5 will continue to win more of those large programs, which could each bring revenues in the range of $5 to $20 million a year for each one of those programs. And actually, you can see those in some of the last few press releases of large wins for G3.

Speaker Change: We believe <unk> five will continue to win more of those large programs, which could each bring revenues in the range of $5 million to $20 million a year for each one of those programs.

Speaker Change: And actually you can see differences in some of the lost but last few press releases of large weighting sport jackpot.

Sam Rubin: Lastly, our two large programs in optics, both related to our proprietary Black Diamond Glass, for which we have an exclusive license from NRL. One of those programs we discussed in the past, the Apache program. It is progressing, yet we encountered some delays and are somewhat behind schedule. Another program is fairly new and we have not discussed it previously, but it is also based on our NRL license materials. And while new, this program is moving at a very fast pace and is expected to soon join our club of multi-million dollar hoarders. So as you can see, those are what we would call our large programs, programs that each have a revenue potential that is north of $10 million a year.

Speaker Change: Lastly, our two large programs in optics, both related to our proprietary black Diamond glass, which we have an exclusive license for me another one.

Speaker Change: One of those programs, we discussed in the past that put your programming. It is progressing if we encountered some delays and all somewhat behind schedule.

Speaker Change: Another program is fairly new and we have not discussed it previously but it is also based on our antibody licensed materials and while new this program is moving at a very fast paced pace and is expected to soon join our club of multimillion dollar orders.

Speaker Change: So as you can see there so what we would call our large programs programs that each have a revenue potential that is north of $10 million a year and is therefore, each one of them can be somewhat transformative to our company our size.

Sam Rubin: And therefore, each one of them can be somewhat transformative to a company our size. It used to be one or two of those, and we would discuss them in great detail, but now having at least six of them in a mature stage, it becomes a bit less practical to discuss all of them in such great detail. Some of those programs, as I just mentioned, are based on our unique black diamond material. Black Diamond, to remind everyone, is a family of infrared glasses.

Speaker Change: He used to be one or two of those and we will discuss them in great detail, but now having at least six of them in a mature stage it becomes a bit less practical to discuss all of them in such great data.

Speaker Change: Yeah.

Speaker Change: Some of those programs and it's like you just mentioned are based on our unique black diamond materials.

Speaker Change: Black Diamond to remind everyone is a family of infrared glasses last sentence plausible materials, but infrared materials, let's say, which are maintenance of USA and provide two separate advantages. One is that's always an alternative to the use of germanium gallium to mature.

Unknown Attendee: Unknown Attendee, Albert Miranda, Shmuel Rubin, Gene Inger, Lightpth Tech One is that there are an alternative to the use of germanium and gallium, two materials which heavily depend on supply out of China and for which China has limited the export of. And the black diamond materials also provide some significant technical advantages in system design. Often driving significant reduction in the size and weight of the overall system, while often also improving the overall performance. Our Black Diamond materials include our proprietary BDNL materials, which we own exclusively via a license from U.S. Naval Research Laboratory, as well as our more general BDNL materials.

Speaker Change: Which heavily dependent on supply out of China, and for which China has limited export pulp.

Speaker Change: And the black Diamond to materials also provide some significant technical advantages in system design.

Speaker Change: Often driving significant reduction in the size and weight towards the overall system, while often also improving the overall performance of the system.

Speaker Change: Our black Diamond's materials include our proprietary btn metal materials, which we owned exclusively via a license from U S. Naval Research laboratory as well as more general BD six.

Sam Rubin: In recent months, we have seen a very strong growth in demand for all of those materials, but in particular for the BDNL materials such as BDNL-4 and BDNL-8. to a point that required us to start adding manufacturing capacity. in anticipation of this demand and the new programs translating into ship. Since these materials are now key to several programs of record, we also receive monetary support from the DOT, Department of Defense, to increase our capacity and processing capability. So for the most part, the upcoming expansion, which we're starting now with our manufacturing capacity, is actually going to be financially supported by our customer, the government or end The expansion in the capacity and the financial support from the DoD to do so should be seen as a positive indication we are on the right track.

Speaker Change: In recent months, we have seen a very strong growth and demand for all of those materials, but in particular for the BD and other materials, such as <unk> four and <unk> eight two.

Speaker Change: To a point that required us to start adding manufacturing capacity in anticipation of this demand and the new programs translating into shipments.

Speaker Change: Since these materials are now key to several programs of record. We also receive monetary support from the D. O T Department of defense to increase our capacity and processing capability.

Speaker Change: So for the most spot the upcoming expansion, which we're starting now without what manufacturing capacity is actually going to be financially supported by our customer the government or end customer.

Speaker Change: The expansions of capacity and the financial support from the Dod to do so should be seen as a positive indication we onto the right track and that what investment in Black Diamond technology, which we started about four years ago in full force has indeed created a differentiator we are looking for.

Sam Rubin: And our investment in black diamond technology, which we started about four years ago, in full force, has indeed created a differentiator we are looking at. While I have been focusing so far on big programs, we also have a lot of progress in many other fronts, and especially the adoption of our black diamond material to replace germanium. In the last 90 days, since the closing of the G5 deal, we have booked over $19 million of new orders in a 90-day period. Closing of the G5 acquisition was done mid-quarter, and so these numbers are not fully reflected in the backlog.

Speaker Change: Yeah.

Speaker Change: Why do they have been focusing so far on big programs. We also have a lot of progress in many other funds and especially the adoption of our black diamond material to replace germanium.

Speaker Change: In the last 90 days since the closing of the G. Five deal we have booked over $19 million, one $9 billion of new orders and a 90 day period.

Closing of the G. Five acquisition was done mid quarter and so these numbers are not fully reflected in the backlog against the last 90 days from before today.

Sam Rubin: Again, so the last 90 days from before today. which I will talk about shortly. But given that it happens to be exactly three months since we closed, I thought I would share this booking number for that period, as it is a very strong indicator for what we're looking for to see in the near future. Now, I've spoken a lot about sales and our growth opportunities, or actually at this point, growth reality, no longer just an opportunity.

Speaker Change: Which I will talk about shortly but given that it happens to be there's actually three months since we closed what I would share. This booking number for that period is it didn't say very strong indicator for what we're looking for to see in the near future.

Speaker Change: Now I've spoken a lot about the sales and our growth opportunities. So actually at this point in Gulf reality, no longer just an opportunity.

Sam Rubin: But I would also be amiss to focus on just that and not also discuss some of the shorter term aspects of the business. specifically.

Speaker Change: But I would also be a miss to focus on just that and not also discuss some of the shorter term aspects of the business.

Speaker Change: Specifically.

Sam Rubin: I would like to share some of my views on how recent geopolitical events and the subsequent economical events impact us, or might impact us, and what risks we face as a result of those and how we plan to address them. Over the last five years, Lightpth has changed in many ways. Not only have we changed our product mix and value proposition, as we just discussed, But with that, we have also seen a change in our manufacturing footprint and our end market. Five years ago, most of the company's manufacturing was located in China. both in headcount and foot.

Speaker Change: I would like to share some of my views on how recent geopolitical events and the subsequent economical events impact us or might impact us and whats. The risks we face are as a result of those and how we plan to address them.

Speaker Change: Over the last five years like path has changed in many ways not only have we changed our product mix and value proposition as we just discussed.

Speaker Change: But with that we have also seen a change in our manufacturing footprint and our end markets.

Speaker Change: Five years ago, most of the company's manufacturing was located in China.

Speaker Change: Both in head count and footprint.

Sam Rubin: As you can imagine, that opened us to quite a bit of exposure in risk when it came to tariffs and recession in China and international trade. Today, 45% of our headcount and 56% of our footprint are in the U.S. China as a sales destination accounts for less than 10%, maybe even as low as 5% of our world average. What this means is that our position when events like tariff or recession in the Chinese economy happen, we are far better positioned than we ever were. However, it does not make us immune and it has reduced our exposure, but it has reduced our exposure and provided us with a better toolkit to use when such events happen.

Speaker Change: As you can imagine that's opened up to quite a bit of exposure and risk when it came to tariffs and recession in China and international trade.

Speaker Change: Today.

Speaker Change: 45% of our head count and 56% of our footprint in the U S.

Speaker Change: China is our sales to the nation accounts for less than 10%, maybe even as low as 5% of that was revenue.

Speaker Change: What this means is that we're position when events like Thomas of recession in the Chinese economy happened, we are far better positioned than we ever were.

Speaker Change: However, it does not make us immune and it has reduced our exposure.

Speaker Change: It has to reduce that exposure and provided us with a better tool kit to use when such events happened.

Sam Rubin: So, when the April tariffs rolled out, we were able to minimize the direct impact to our business by making some quick changes in our internal supply chain. Today, almost no specific manufacturing activity occurs in only one location, or depends on only one location. The only exception is glass, which is made only in Orlando. Every manufacturing capability that we have is performed in at least two locations in parallel. This is something we started during COVID and have been continuing to build upon since. As a result of that, we can shift manufacturing between locations and between countries as needed.

Speaker Change: So.

Speaker Change: When is it April tariffs rolled out we were able to minimize the direct impact to our business by making some quick changes in our internal supply chains.

Speaker Change: Today, almost no specific manufacturing activity occurs in only one location or dependence on only one location. The only exception is glass, which is made only in Orlando.

Speaker Change: Every manufacturing capabilities. We have has performed in at least two locations in Panama.

Speaker Change: This is something we started during COVID-19 and have been continuing to build upon since as a result of that we can shift manufacturing between locations and between countries as needed.

Sam Rubin: What does that mean to our potential? For customers that still depend on products from China, we have found that when the supply chain pressure is very high, such as a 145% tariff, Customers are willing to pay the additional cost of manufacturing the U.S. or Europe. The more challenging part is going to be when the tariff goes down to maybe only 10%. Where will the customers want products? So as a team, this is an open question, which we don't know the answer to. So the team right now is further focused on optimizing those internal supply chains, building alternatives, and more importantly, having conversations with customers on what they're willing to pay as a premium for supply chain resilience, or in other words, how much are they willing to pay for long-term supply out of the US or out of Europe.

Speaker Change: What does that mean to our potential risk.

Speaker Change: So for customers it still depends on products from China, we have found that wins of supply chain pressure is very high such as a 145% tariff.

Speaker Change: Customers are willing to pay for the additional cost of manufacturing in the U S or Europe.

Speaker Change: The more challenging part is going to be when the tariff goes down to maybe only 10%.

Speaker Change: Wearables customers want product.

Speaker Change: So as a team. This is this is an open question, which we don't have answer too. So it's a team right. Now is further focused on optimizing dose internal supply chain build things that alternative and more importantly, having conversations with customers on what they're willing to pay a premium for supply chain resilience.

Speaker Change: In other words, how much are they willing to pay for longer term supply out of the U S out of Europe.

Sam Rubin: Of course, it helps when we all went through this, I don't know, supply chain shock therapy, if you would, in the last few weeks. It makes everyone a bit more receptive to having these conversations, conversations that in the past were very difficult to have.

Speaker Change: Of course it helps when we all went through this supply chain shock therapy. If you would in the last few weeks.

Speaker Change: It makes everyone a bit more receptive to having these conversations conversations that didn't pass were very difficult to have.

Sam Rubin: A secondary of potential challenge for us is additional changes to the supply of geomania. This is almost an opposite problem. We benefit from the lack of supply of germanium, supply restrictions. So in the last few months, we have seen significant activities around redesigning optical systems to use our materials instead of germanium. This is what we have been hoping for when we made the investments in Black Diamond. The challenge is, the question is really, what happens if germanium all of a sudden becomes freely available? Do we lose all of them? The answer to this has two parts.

Speaker Change: Our second area of potential challenge for US is additional changes to the supply of germanium.

Speaker Change: This is almost an opposite to poke problem, we benefit from the lack of supply of germanium supply restrictions. So in the last few months, we have seen significant activities around the redesigning optical systems to use atwood materials instead of germanium.

Speaker Change: This is what we have been hoping for when we made the investments in black Diamond. The challenges. The question is really what happens if germanium all of southern becomes freely available at King do we lose all of this.

Speaker Change: The answer to this has two parts first there are many ways and places where our black diamond materials provide a technical advantage versus germanium or even other materials.

Sam Rubin: First, there are many ways and places where our black diamond materials provide a technical advantage versus germanium or even other materials. The challenge has not been to convince customers. The challenge has always been, or for the most part, to get the customers to make that painful decision or painful effort of changing, making changes in existing systems and designs to use these materials. So to that extent, what we needed most was that motivation of a customer to redesign this. Something that now the export restrictions on germanium actually accomplished for us. Once they do set up eDesign and are using our materials, the system, we believe, works better than it did with Geomania Mode.

Speaker Change: The challenge has not been to convince customers to upset the challenge has always been for the most part to get the customers to make such a painful decision painful efforts of changing making changes in existing systems and design two years. These materials.

Speaker Change: So does that extend what we needed most once that motivation of the customer to redesign the system.

Speaker Change: Something thats now thanks water restrictions on germanium actually accomplished for us.

Speaker Change: Once they do some redesign and are using our materials. The system, we believe works better than it did with Germania montney.

Sam Rubin: And so now this is, this is not to say we necessarily completely replaced germanium in all lenses, it is not exactly like that. But what we found through our customers is that most of the lenses, depending on the system can be made with our materials. And once that happens, the overall system performance improves, and they provide better technical benefits in terms of operating temperature range, for example. So in essence, most of those systems that are being redesigned, once that redesign happens, are actually motivated to continue with our material. Secondly, all signs we're seeing are that China is, if anything, tightening those export restrictions.

Speaker Change: And so now this is <unk>.

Speaker Change: This is not to say, we necessarily completely replace germanium and all it is not exactly like that but what we found through our customers is it most of the lenses depending on the system can be made we've had with materials.

Speaker Change: And once that happens the whole system performance improves and they provide better technical benefits in terms of operating temperature range for example.

Speaker Change: So in essence, most of those systems that are being redesigned once that redesign happens well actually motivated to continue with Atwood materials.

Speaker Change: Secondly, all signs we are seeing golf that China is if anything tightening there was export restrictions.

Sam Rubin: One, if Googling it or searching on ChatGPT can easily find articles that talk about China cracking down on smuggling. And we have even heard from our vendors and competitors in China about surprise audits done by customs to inspect the records of all the geomaniums they have purchased or made, and to make sure it is all properly accounted. Additionally, what we're hearing now, as everyone starts looking into the supply chains of germanium in more detail, is that China has likely been planning this for a very long time. They were not only working to monopolize the processing of raw materials, but also were buying up any available material in the marketplace and from other countries.

Speaker Change: If Google and get towards searching on chat G. P. D can easily find articles that talk about China cracking down on smuggling.

Speaker Change: And we've even heard from our vendors and competitors in China are belt surprised audits done by customs to inspect the records of Volta, Joe medium sales of purchased or made and to make sure. It is all properly accounted for.

Speaker Change: Additionally, what we're hearing now is everyone starts looking into the supply chains of germanium in more detail is that China has likely been planning disappoint very long time, they would not only working to monopolize the pulse of single vault materials, but also we're buying up any available material into the market place and.

Speaker Change: Some other countries.

Sam Rubin: So, as far as we can tell, signs are that this export control will continue, but in any case, as I described earlier, once a redesign happens, we feel very secure. So, our team continues to work with customers to expedite those redesigns as much as possible, so that even if germanium becomes available again, we will already be designed in and then remain in.

Speaker Change: So as far as we can tell signs all said this export control will continue but in any case as I described earlier once the region selling happens we feel very secure.

Speaker Change: So our team continues to work with customers to expedite those redesigns as much as possible. So is that the even if germanium becomes available again, we will already be designed in and then remain in the system.

Alexander: Okay with all this I'll now turn the call over to Alexander.

Albert Miranda: Okay, with all this, I'll now turn the call on to Al Miranda, CFO, to talk about the actual numbers. Al, please go ahead. Thank you, Sam. I will keep my review to a succinct high level of the financials this quarter. As a reminder, much of the information we're discussing during this call was also included in our press release issued earlier today and will be included in the 10-Q for the period.

Alexander: CFO to talk about the actual numbers Allen. Please go ahead.

Alexander: Thank you Sam I will keep my review to assist synced high level on the financials this quarter.

Alexander: As a reminder, much of the information we're discussing during this call is also included in our press release issued earlier today.

Alexander: Included in the 10-Q for the period.

Alexander: Okay.

Albert Miranda: Revenue for the third quarter of fiscal 2025 increased 19.1% to 9.2 million as compared to 7.7 million in the same year ago quarter. Sales of Infrared Components were $3.6 million or 40% of the company consolidated revenue. Visible components was $2.8 million, or 31% of consolidated revenue. Revenue from assemblies and modules were $1.9 million, or 20%, and revenue from engineering services was $0.8 million, or 9%. gross profit increased 66% to 2.7 million or 29.1% of total revenues in the third quarter of 2025. as compared to $1.6 billion or 20.9% of total revenues in the same year-ago quarter.

Alexander: Revenue for the third quarter of fiscal 2025 increased 19, 1% to $9 2 million as compared to $7 7 million in the same year ago quarter.

Alexander: Sales of Infor, a components were $3 6 million or 40% of the company consolidated revenue.

Alexander: Visible components was $2 8 million or 31% of consolidated revenue.

Alexander: From assembly of modules were $1 $9 million or 20% and.

Alexander: And revenue from Engineering services was <unk> 8 million or 9%.

Alexander: Gross profit increased 66% to $2 7 million or 29.1% of total revenues in the third quarter of 2025.

Alexander: As compared to $1 6 billion or 29% of total revenues in the same year ago quarter.

Albert Miranda: The increase in gross margin as a percentage of revenue is primarily due to a more favorable product mix. more revenue from assemblies and modules and engineering services. which typically have higher margins than infrared components.

Alexander: The increase in gross margin as a percentage of revenue was primarily due to a more favorable product mix with more revenue from assemblies and modules and engineering services.

Alexander: Which typically have higher margins than infrared components.

Albert Miranda: Operating expenses increased 44% to $6 million for the third quarter of fiscal 2025, as compared to $4.2 million in the same quarter of the prior fiscal year. The increase was primarily due to higher legal consulting fees related to business development initiatives, including 0.7 million in expenses associated with the G5 acquisition, product development costs of 0.2 million, additional sales, general, and admin costs from G5 of 0.4 million. a net increase of amortization expense of $0.3 million, as well as increased sales and marketing spend to promote new products.

Alexander: Operating expenses increased 44% to $6 million for the third quarter of fiscal 2025.

Alexander: <unk> to $4 two.

Alexander: $2 million in the same quarter of the prior fiscal year.

Alexander: The increase was primarily due to higher legal and consulting fees related to business development initiatives, including.

Alexander: $7 million in expenses associated with the <unk> acquisition product development costs of <unk> 2 million additional sales general and admin costs from GE $5 4 million.

Alexander: Our net increase in amortization expense of <unk> 3 million as well as increased sales and marketing spend to promote new products.

Albert Miranda: Net loss in the third quarter of fiscal 2025 totaled $3.6 million, or $0.09. per basic and diluted share as compared to $2.6 million or $0.07 per basic and diluted share in the same quarter of the prior fiscal year. Even though a loss for the third quarter of fiscal 2025 was $2 million compared to a loss of $1.5 million for the same period of the prior fiscal year.

Alexander: Net loss in the third quarter of fiscal 2025 totaled $3 6 million.

Alexander: Or 0.09.

Alexander: Our basic and diluted share as compared to $2 6 million or a 0.07 per basic and diluted share in the same quarter of the prior fiscal year.

Alexander: EBITDA loss for the third quarter of fiscal 2025 was $2 million compared to a loss of $1 5 million for the same period of the prior fiscal year.

Albert Miranda: Cash and cash equivalents as of March 31, 2025 totaled $6.5 million as compared to $3.5 million as of June 30, 2024. As of March 31, 2025, total debt stood at $5.5 million and backlog totaled $27.4 million.

Alexander: Cash and cash equivalents as of March 31, 2025 totaled $6 5 million as compared to $3 5 million as of June 32024.

Alexander: As of March 31, 2025, total debt stood at $5 5 million in backlog totaled 27 4 million.

Alexander: A few more words on <unk>.

Albert Miranda: A few more words on G5. Post merger integration is going well. It is on schedule. The most important positive finding is how well the companies fit culturally and work together. It really is amazing. We're integrating. where it makes sense. And on a timeline that makes sense. Normally, this would be considered a balancing act. But both organizations are aligned on goals and are moving quickly towards integrating and leveraging expertise.

The post merger integration is going well and is on schedule.

Alexander: The most important positive finding is how well the company is fit culturally and work together it really is amazing.

We are integrating.

Alexander: Where it makes sense and on a timeline that makes sense.

Alexander: Normally this would be considered a balancing act, but both organizations are aligned on goals and are moving quickly towards integrating and leveraging expertise.

Alexander: Yeah.

Albert Miranda: As Sam noted, following the acquisition of G5, the expectation is for the combined companies to generate $51 million in revenue in the 12 months following the acquisition. G5 has had new bookings of $13 million since the acquisition in February. Most of the new orders are scheduled to ship from June through December. So the financial impact will start to be visible in Q4 and be predominant in Q1 and Q2.

Alexander: As Sam noted following the acquisition of <unk>. The expectation is for the combined companies to generate $51 million in revenue in the 12 months following the acquisition.

Alexander: <unk> five has had new bookings of $13 million since the acquisition in February.

Alexander: Most of the new orders are scheduled to ship.

Alexander: From June through December so the financial impact will start to be visible in Q4.

Alexander: And be predominant in Q1 and Q2.

Albert Miranda: We have spoken a little about the price and financing for the acquisition. And we've done filings previously on it. There is very detailed information in the upcoming 10Q, the previous filings, and more to come in the next weeks. We'd be happy to answer questions on clarifying anything about the financing structure. However, our focus together with the G5 team is how to maximize revenues and earnings. Regarding earnings, specifically net income, there will be significant complex accounting treatment and activity in the next two quarters related to financing and valuation of G5. This is normally the case. will endeavor to make the non-operating activity transparent so that you can see the true performance of LightPath and G5.

Alexander: We have spoken a little about the price some financing for the acquisition.

Alexander: So on filings previously on it.

Alexander: Yeah.

Alexander: There is very deep has a detailed information in the upcoming 10-Q to previous filings and more to come in the next weeks, we'd be happy to answer questions on quantifying anything about the financing structure.

Alexander: However, our focus together with <unk> team has had to maximize revenues and earnings.

Alexander: Regarding earnings specifically net income there'll be significant complex accounting treatment and activity in the next two quarters related to financing and valuation of <unk> five.

Alexander: This is normally the case.

Alexander: We'll endeavor to make the non operating activity transparent. So you can see the true performance of Lightpath and <unk> five.

Albert Miranda: Going forward, since bottom line numbers can be impacted by evaluation of warrants and the convertible preferred, we'll rely more heavily on EBITDA and adjusted EBITDA to aid in the transparency and comparative analysis.

Alexander: Going forward since bottomline numbers can be impacted by valuation of warrants in the convertible preferred.

Alexander: We'll rely more heavily on EBITDA and adjusted EBITDA to aid in transparency and comparative analysis.

Alexander: Yeah.

Albert Miranda: G5 is a rare acquisition event. It is well run, profitable, growing, strategic, and a cultural fit. It should be no surprise that I view the acquisition of G5 as a robust tool to supercharge the near-term potential of Lightpath, particularly in the defense space, with the introduction of high-margin, high-ASP, and incremental products. We see this as providing an expedited path to achieving our long term goal of 15% EBITDA margins. to defining Lightpath as a platform company focused on discipline and strategy and delivering value to our shareholders as we scale and grow.

Alexander: <unk> is a rare acquisition event and as well Ron.

Alexander: <unk> growing strategic and cultural fit.

Alexander: It should be no surprise that I view the acquisition of <unk> five as a robust tool to supercharge their near term potential of light path, particularly in the defense space with the introduction of high margin high ASP.

Alexander: Incremental products.

Alexander: We see this as providing an expedited path to achieving our long term goal of 15% EBITDA margins.

Alexander: Defining flight path is a platform company focused on disciplined strategy and delivering value to our shareholders as we scale and grow.

Sam Rubin: With that, I will turn the call back over to you, Sam. Okay.

With that I will turn the call back over to you Sir.

Alexander: Okay.

Alexander:

Sam Rubin: Thank you everyone for joining us today. As we look forward, we remain laser focused on executing our strategy to transform LightPath into a next generation optics and imaging solution provider. With the integration of G5 Infrared, we've expanded our portfolio to high-end cooled infrared space, adding significant new growth opportunities. especially in defense. Combined with the accelerating shift towards our proprietary Black Diamond Optics as a replacement for legacy germanium, we are positioned to deliver meaningful progress across our automotive, defense, and industrial markets.

Alexander: Thank you everyone for joining us today as we look forward, we remain laser focused on executing our strategy to transform <unk> into a next generation optics imaging solution provider.

Alexander: We've seen integration of G. Five infrared we've expanded our portfolio to high end cooled in fluids space I think.

Alexander: <unk> new growth opportunity, especially in defense.

Alexander: Buying from its accelerating shift towards our proprietary black Diamond optics is a replacement for legacy germanium, we are positioned to deliver meaningful progress across several automotive defense and industrial market.

Alexander: Yeah.

Sam Rubin: We believe Fiscal 2025 marks an inflection point as we build momentum towards achieving our long-term goals of sustained growth, profitability, and market leadership. We are confident that the actions we are taking today from scaling up production to drive innovation will deliver strong value to our customers and shareholders alike.

Alexander: We believe fiscal 2025 marks an inflection point as we build momentum towards achieving our long term goals of sustained growth profitability and market leadership. We are confident that the actions. We're taking today from scaling up production to drive innovation will deliver strong value tower.

Alexander: Customers and shareholders alike.

Operator: With that, I will now hand the call over to the operator for the Q&A. Session Operator. Thank you, sir.

Alexander: That I will now hand, the call over to the operator for the Q&A question session.

Speaker Change: Session operator.

Speaker Change: Thank you, Sir ladies and gentlemen, we will now be conducting the question and answer session.

Operator: Ladies and gentlemen, we will now be conducting the question. Do you like to ask a question? on each telephone key. The confirmation tone will indicate Tejalani. You may press star and then 2 to leave the question. It may be necessary to pick up your hands.

Speaker Change: If you'd like to ask a question. Please press Star then one on <unk>.

Speaker Change: Key pad.

Speaker Change: A confirmation tone will indicate your line is in the question queue.

Speaker Change: You may place stall and then choose to leave the question queue.

Speaker Change: All participants, making Giza speaking equipment it may be necessary to pick up your handset before pressing disc jockeys.

Glenn Mattson: Our first question comes from Glenn. Hi guys, thanks for taking the question and thanks for all the detail of the call. First, a lot of good things going on.

Speaker Change: Our first question comes from Glenn Mattson of Ladenburg Thalmann. Please go ahead.

Glenn Mattson: Hi, guys. Thanks for taking the question and thanks for all the detail on the call.

Glenn Mattson: First a lot of good things going on so.

Sam Rubin: So, but I will ask you about the one kind of issue that you brought up on the Apache. Can you talk about the delays and the maybe just some color as to like, is this just was there some developments when the product wasn't doing what it needs to do? Or was there some kind of timing delay? Or is it actual like, derailing that operation?

Glenn Mattson: I'll ask you about the one.

Glenn Mattson: Kind of issue that you brought up stand on the Apache can you talk about the delays.

Glenn Mattson: And the.

Glenn Mattson: Maybe just some color as to like is this just a was there some developments when the product was doing what it needs to do or was there some kind.

Glenn Mattson: Timing delay or is that actual like daily net opportunity.

Sam Rubin: No, so the delay is on our side. Our team was not able to meet the timelines we've committed to or thought we would. It's sort of a combination of a couple of things. First of all, we took on a stretch project. So it's a very challenging product. Otherwise, we wouldn't get the premium we're getting for it. It's really a cutting edge in terms of the complexity of the product. And it depends heavily on BDNL8, one of our new materials. We were running out of capacity for a while as we were seeing sort of an unexpected influx of demand in a couple of other areas.

Glenn Mattson: So is the delays on our side.

Glenn Mattson: Our team was not able to meet the timelines we've committed to afford to we would.

Instead of a combination of a couple of things first of all we took on.

Glenn Mattson: <unk> eight stretch projects. So it's a very challenging product of wise, we wouldn't get the premium we're getting for it.

Glenn Mattson: Really a cutting edge in terms of the complexity of the product.

Glenn Mattson: And it depends heavily on BD Enel eight one of our new materials.

Glenn Mattson: We were running out of capacity for a while as we were seeing sort of unexpected influx of demand did a couple of other areas and so we're balancing act between what do we make last fall, while we're adding capacity and we've made enough philosophy, what we thought would be enough for this project, but it just wasn't.

Sam Rubin: And so we're balancing act between, you know, what do we make glass for while we're adding capacity. And, you know, we made enough glass to what we thought would be enough for this project, but it just wasn't. So we're a bit delayed. We had to reschedule new glass belts for this, and then start off with the process of making the lenses and assembling. So we're there. We don't think it's something that's inherently a problem. It's definitely not from the customer. It's completely on us and just biting off something big and not chewing it fast.

Glenn Mattson:

Glenn Mattson: So were the delays we had to reschedule scheduled new glass bottle for this and then start off with the process of making the lenses and assembling.

Glenn Mattson: So with that we have.

Glenn Mattson: We don't think it's something we get.

Glenn Mattson: I don't see a problem, it's definitely not from the customer it's completely on us and just.

Glenn Mattson: Just biting off something big and and not chewing gets fast enough.

Glenn Mattson: Yeah, that's great. Nothing permanent there. It sounds like so.

Glenn Mattson: Yes, that's great nothing permanent there it sounds like so and then on the BD glass you mentioned another new <unk>.

Sam Rubin: And then on the BD glass, you mentioned another new Project. That's very fast paced. I don't know what color you can get. But what? How would you define very fast than any other color? Very fast, meaning that the government is giving us pretty much any money we need or writing checks to give us equipment to move faster than we are and for anything that we need. This material, it's a redesign of a system, an existing system that with the redesign performs exponentially better than what it did before, like, you know, orders of magnitude kind of mind blowing a bit to see it, if I could have shared.

Glenn Mattson: Project is a very fast pace I don't know what color you can give us.

Glenn Mattson: But how.

Glenn Mattson: How would you define very fast and any other color.

Glenn Mattson: Hey, great.

Glenn Mattson: Very very fast, meaning that the government is giving us pretty much in.

Glenn Mattson: Any money, we need or writing checks to give us equipment to move us faster than we are fighting.

Glenn Mattson: Why do you think that we need.

Glenn Mattson: This material, it's a redesign of our system.

Glenn Mattson: An existing system that with the redesign performs exponentially better than what it did before.

Glenn Mattson: Orders of magnitude kind of mine flowing a bit to see it if I could have shed.

Sam Rubin: And so the customer is very interested to move as quickly as possible with it to, you know, start upgrading existing systems and so on. Again, it sort of landed exactly at that perfect storm of, you know, everyone wanted black diamond glass because of the germania. We were, we took on a couple of R&D projects that were taking capacity, we needed to juggle things around. Not a big issue there, other than, you know, it's just a lot to do at the same time.

Glenn Mattson: And so the customers very interested to move as quickly as possible with it too.

Glenn Mattson: Start upgrading our existing systems and so on again it still took landed exactly it's a perfect storm of.

Glenn Mattson: Everyone wanted to black Diamond glass because of the germane.

Glenn Mattson: We were we took a couple of R&D projects that we're taking capacity, we need to juggle things around.

Glenn Mattson: Not a big issue there other than it is.

Glenn Mattson: They love to do it at the same time.

Glenn Mattson: But when this moves into production, and we're talking about a year to a year and a half from now, this is big time in our big league, meaning, you know, $10 million or more. That's great. And with the government commitments that they're making, it sounds like that there's some high degree of probability that that'll Yeah, always nice when your customer's footing is a bill for the equipment.

Glenn Mattson: But when this moves into production and we're talking about a year to a year and a half from now.

Glenn Mattson: This is big time Big League, meaning.

Glenn Mattson: $10 million of more year.

Glenn Mattson: That's great and what the government commitments that they're making it sounds like there is some degree of.

Glenn Mattson: Profitability.

Glenn Mattson: I'll come to fruition yet yes.

Speaker Change: Yeah always nice when your customers footing the bill for equipment.

Glenn Mattson: Yeah, one more quick for Alvin. I'll jump back in the queue. The gross margin outlook, I'm just thinking about the growth in assemblies and modules sequentially. I imagine most of that is G5, and that was only, I think, a month or whatever, six weeks maybe of G5. So next quarter, you'll have a full quarter, you'll have that product line, that segment will jump again sequentially, and that's a higher margin segment than some others. So that's just a natural gross margin expansion situation.

Glenn Mattson: Yes.

Glenn Mattson: One more quick for Al and then I'll jump back into queue. The gross margin outlook I'm, just thinking about the growth in assembly. The module sequentially I imagine most of that is G. Five and that was only I think a month or whatever six weeks, maybe a G. Five so next quarter, you'll have a full quarter you'll have that.

Product line that that segment will jump again sequentially and Thats, a higher margin segment that some others, though.

Glenn Mattson: That's just a natural gross margin expansion situation al is that correct.

Glenn Mattson: Al, is that correct? That's, that's right, Glenn, we expect the gross margin from this quarter next quarter to go up, because we'll have a full quarter of assemblies and modules and cameras. Okay, great. I'll jump back into the queue. Thanks, Seth.

Speaker Change: Yes, that's right Glenn we expect the gross margin from this quarter and next quarter to go up because we'll have a full quarter of assemblies of modules and cameras.

Glenn Mattson: Yes.

Speaker Change: Okay, great I'll jump back in the queue. Thanks, guys.

Glenn Mattson: Okay.

Jaeson Schmidt: Our next question comes from Jaeson Schmidt. of Lake Street. Please go ahead. Hey guys, thanks for taking my questions. I apologize if I missed this, but what was the backlog number ending March? 27.4 million Perfect. And then just digging into sort of your comments on the $51 million in expected revenue on a combined basis. That seems like a slight downshift from sort of that $55 million plus when the acquisition was announced. Just want to clarify, is maybe that delta really being driven less by the G5 business, which seems to be going really strong and more on what's called legacy light path business?

Speaker Change: Our next question comes from Jason Jason Schmidt.

Glenn Mattson: Street. Please go ahead.

Jason Schmidt: Hey, guys. Thanks for taking my questions I apologize if I missed this but what was the backlog number ending March.

$27 4 million.

Jason Schmidt: Perfect and then just taking into sort of your comments on the 51 million in expected your revenue on a combined basis that seems like a slight downshift from just worried that $55 million plus when the acquisition was announced just.

Jason Schmidt: Wanted to clarify if maybe that delta really being driven less by the G. Five business, which seems to be going really strong and more on kind of let's call. It legacy life might Pap business.

Jaeson Schmidt: So it's, yeah, Jaeson, sorry about the confusion around that. It's really, that's really Sam and I talking two different time frames. $51 million is from February 18th to February 18th, like the next 12 consecutive months. And what Sam's talking about is more about fiscal year calendar. So, starting in June, going forward, kind of. Gotcha. No, that's really helpful.

Jason Schmidt: So it's.

Jason Schmidt: Yes, Jason sorry about the confusion around that it's really that's really salmon I do when you are talking two different timeframes 50.

Jason Schmidt: <unk> 51 million is from February 18th to February 18th.

Sam Rubin: Next 12 consecutive months and with Sam's talking about is more about fiscal year calendar year.

Jason Schmidt: So starting in June going forward kind of thing.

Speaker Change: Got you that's really helpful. And then just the last one from me and ill jump back into you.

Albert Miranda: And then just the last one from me, and I'll jump back into you. Looking at the OPEX line, I know, Al, you called out a number of different kind of line items there. How should we think about OPEX going forward through this calendar year? Yeah, so I kind of don't want to commit to anything just yet. But amortization is still still going to have an impact beyond what we normally see in terms of opex, right? So if we sort of carve that out and then take out, you know, extraordinary M&A expenses, which we've experienced over the last year doing this, although we still have that in Q4, you know, as we wrap up all the filings and whatnot.

Speaker Change: Looking at the Opex line I know al you.

Speaker Change: Called out a number of different line items, there how should we think about opex going forward through this calendar year.

Speaker Change: Yes so.

Speaker Change: Hi.

Speaker Change: I kind of don't want to commit to anything just yet but.

Speaker Change: Amortization is still still going to have an impact beyond what we normally see in terms of opex right.

Speaker Change: So if we sort of carve that out and then take out.

Speaker Change: Extra ordinary M&A expenses, which we've experienced over the last year doing this.

Speaker Change: Although we still have that in Q4, as we wrap up all the filings and whatnot.

Albert Miranda: But if we look past that, I would think that the combined companies are around five per quarter. Okay, perfect. Thanks a lot, guys. Yeah, thank you, Jaeson.

Speaker Change: But if we look past that.

Speaker Change: I would think that as combined companies around five per quarter.

Speaker Change: Okay perfect. Thanks, a lot guys.

Jason Schmidt: Yes, Thank you Jason.

Speaker Change: Yes.

Richard Shannon: Our next question comes from Richard Shannon of Craighillam. Please go ahead. Thanks guys for taking my questions as well.

Speaker Change: Our next question comes from Richard Shannon of Craig Hallum. Please go ahead.

Richard Shannon: Well, thanks, guys for taking my questions as well.

Richard Shannon: Let's start with a financial question here. In the last earnings call, I think you were asked about whether you expected to see a break-even or positive EBITDA in this June quarter, and you said yes. Is that still your expectation? It'll be close. That's for sure. We're, we expected to see a bit more camera revenue in June. And we certainly have the backorder backlog, Sam mentioned the 13 million, right? We're working on building that right. So we went through sort of the networking capital outlay. We have supply chains of goods and materials come in. We're going to ship sort of starting this second week of June, some of those larger, more expensive systems. So we'll get a full quarter of revenue in for Q4.

Richard Shannon: Let's start with a financial question here in the last earnings call.

Richard Shannon: I think you were asked about what do you expected to see a breakeven.

Richard Shannon: Breakeven or positive EBITDA in this June quarter, and you said, yes is that still your expectation.

Richard Shannon: It'll be close.

Richard Shannon: For sure.

Richard Shannon: Where we.

Richard Shannon: We expected to see a bit more camera revenue in June and.

Sam Rubin: And we certainly have the back order backlog Sam mentioned the $13 million.

Richard Shannon: Eight.

Richard Shannon: We're working on building that right. So we went through sort of the networking capital outlay.

Richard Shannon: Supply chain, so goods and materials come in.

Richard Shannon: We're going to ship sort of starting the second week of June some of those larger more expensive systems.

Richard Shannon: So we'll get a full quarter of revenue and for Q4.

Richard Shannon: But not as much as you know, when I spoke to you last, I said, we'll definitely break even. Yeah, but even a level, so it'll be close. But just to clarify, you mentioned the 13 million that I said that was bookings that we did bookings, we're not saying 13 million in this quarter of June. Correct. 13. The current Yeah, 13 million bookings from February 18. Yeah, today, or somewhere around Does that help? Yes, yep.

Richard Shannon: But not as much as you know when I spoke to you asked and said well definitely breakeven.

Richard Shannon: Well the EBIT level. So it will be close but just to clarify you mentioned the $13 million that I said that was bookings that we did bookings we don't think 13 million in this quarter, but you're correct <unk>.

Richard Shannon: The current 13 million bookings from February 18th.

Richard Shannon: Today or somewhere around there.

Richard Shannon: Does that help you.

Richard Shannon: Just as long as I think we're doing an apples to apples comparison, what you said last time and I got your Yeah, we're still we're still struggling with apples to apples between calendar year fiscal year of the acquisition. We are definitely we have a lot of fun. I'm sure you are.

Richard Shannon: Yes, yes.

Bill: Just as long as that I think we're doing an apples to apples comparison, what you said last time and I got to your answers. So thanks for that Bill.

Richard Shannon: We're still we're still struggling with apples to apples.

Richard Shannon: <unk> calendar year fiscal year of the acquisition.

Richard Shannon: We are definitely we have a lot of fun.

Richard Shannon: I am sure you are well.

Richard Shannon: Let's ask a question on your missile program with Lockheed Martin here. The press release here talks about potentially seeing a decision late this year, early next year. Is this the final decision?

Richard Shannon: If you ask a question on the.

Speaker Change: Missile program with Lockheed Martin here.

Speaker Change: The press release here talks about potentially seeing a decision late this year early next year is this the final decision because I think you were alluding to something late this fall about being kind of a preliminary view into the potential decisions just the actual decision that you're expecting.

Richard Shannon: Because I think you were alluding to something late this fall about being kind of a preliminary view into the potential decisions. Is this the actual decision that you're expecting? Yeah, this is the potential decision.

Speaker Change: That potential decision. So let me clarify and this was said publicly so I'm not going to get to trouble.

Sam Rubin: So let me clarify, and this was said publicly, so I'm not going to get into trouble sharing this. This summer or early fall is when we expect the customer to start their own testing of the system. And since we're talking about a innovative system that is vastly different than the solution Raytheon proposes You know, we, the, the Comparison is really, you know, does it work or doesn't kind of there's a level that the technology promises. And we think there's a good chance that already in the fall, we will get a very strong indication from the customer.

Speaker Change: Sharing this.

Speaker Change: This summer or early fall is when we expect the customer to stop his though they are in testing of the system.

Speaker Change: Since we're talking about a <unk>.

Speaker Change: Innovative systems that is vastly different than the solution Raytheon proposes.

Speaker Change: So the.

Speaker Change: Comparison is really doesn't work or doesn't kind of to the levels that the technology promises and we think there's a good chance that already in the fall we will get a very strong indication from the customer offset.

Sam Rubin: So yeah, formally, the decision needs to be made by, I think, October 2026 was what publicly was said, realistically, the customer is starting to get delivered in the summer, early fall. And if the technology is really delivering the promises that we think, we might be seeing a earlier decision. Okay, I'll look forward to forward to seeing that.

Speaker Change: So yes with formerly the decision needs to be made by I think October 2026 was whats publically, but said realistically the customers starting to get delivered in the summer early fall and if the technology, it's really delivering the promises that we think we might be seeing.

Speaker Change: Earlier decision in England.

Speaker Change: Okay, well look forward.

Speaker Change: What we're just seeing that maybe a last question I'll step out of line here is looking at the.

Richard Shannon: Maybe a last question.

Sam Rubin: I'll step out of line here is looking at the light path on the camera side here with Mantis and related products here. I just want to get your get your latest update and how the progress has been with penetrating the various markets intended there. Yeah, the positive one is that on the furnace inspection side, these cameras, you know, the long huge cameras, $30,000 for looking into furnaces running at 2000 degrees, that's going extremely well to a point that we're getting what we hoped for. And that is customers that in the past would buy from us only the camera and build their own optics are now seeing that our complete system performs better than their own developed system and are testing and evaluating our complete system and starting to buy those.

Speaker Change: The light pass on the camera side here with Mantas and related products here I guess wanted to get your get your latest update on how the progress penetrating the various markets intended there.

Speaker Change: Yeah, So Paul.

Speaker Change: <unk> one.

Speaker Change: On the furnace inspection side <unk> camera was the long huge cameras $30000 for looking into furnaces running at 2000 degrees, that's going extremely well to a point that we were getting what we hoped for and that is customers that in the past would buy from a Sony has a camera.

Speaker Change: And built their own optics are now seeing is that our complete system performs better than.

Speaker Change: One developed system and testing and evaluating our complete system and starting to bite us exceptionally well and the team is doing a.

Sam Rubin: So that's exceptionally well, and the team is doing an unbelievable performance, you know, great job there. We're very excited on that part.

Speaker Change: Unbelievable to form great jobs there.

Speaker Change: <unk> cited on that part.

Sam Rubin: Optical gas imaging is less so. And the reason is we outlined it last time. And unfortunately, I don't have an update, a big update since then, we need to go through a formal qualification test or quantification test, if you would, of how much gas exactly the camera can detect. EPA in the last two years has actually Standardized that and what used to be a Sort of auxiliary technology that if people wanted they would do optical gas imaging is now required by EPA and obviously once it's required Then there's also required thresholds and specifications. So now there is a formal qualification process The line to get in line to the qualification is absurd.

Speaker Change: Optical gas imaging.

Speaker Change: Is less so and the reason as we outlined it last time and unfortunately, I don't have an update the big update since then.

Speaker Change: We need to go through a formal qualification tests quantification test if you would.

Speaker Change: How much gets exactly the camera can detect if you would EPA in the last two years has actually.

Speaker Change: Standardize that and what used to be a sort of auxiliary technology that if people wanted they would do optical gas imaging is now with clients by EPA and obviously once it's required lenses also required thresholds and specification. So now as a as a formal qualification process.

Speaker Change: Is aligned to get in line to the qualification is absurd, it's half a year to a year, we managed to secure much sooner spot then.

Sam Rubin: It's half a year to a year. We managed to secure a much sooner spot than Texas, where the test was supposed to be done, got hit by a massive storm. The long and the short is we expect it later this month, and hopefully then we'll be off running. Okay, appreciate that update.

Speaker Change: This with the test was supposed to be done by a massive store the long and the short is we expected later this month and hopefully that will be all funding.

Speaker Change: Yeah.

Speaker Change: Okay I.

Richard Shannon: That's all the question for me guys. Thank you.

Speaker Change: I appreciate that update that's all the questions from me guys. Thank you.

Scott Buck: Okay, thank Our next question comes from Scott Buck of HC Wainwright. Please go ahead. Hi, good afternoon, guys. Just a couple for me and thanks for the time.

Okay. Thanks.

Speaker Change: Okay.

Speaker Change: Our next question comes from Scott Buck of banks.

Speaker Change: C. Wainright. Please go ahead.

Speaker Change: Hi, Good afternoon, guys just a couple from me and thanks for the time.

Sam Rubin: I'm curious, Sam, it sounds like momentum on the G5 side is I guess just outstanding, but are there any capacity constraints there? Or do you guys have the ability to move some production down into Orlando? What does that look like? That's a great question. Capacity constraints comes in one of three forms in a business like G5. The first is the assembly constraint. To that extent, there's quite a bit of capacity there. They run one shift only, we can add shifts, we can add people, there's a lot of trained workforce in that area. I'm less concerned on that part.

Speaker Change: I'm curious if it sounds like momentum on the <unk> side is I.

Speaker Change: I mean, I guess just outstanding but.

Speaker Change: Are there any capacity constraints, there or do you guys have the ability to move some <unk>.

Speaker Change: Reduction down to Orlando or what does that look like.

Speaker Change: That's a great question.

Speaker Change: Capacity constraints come in comes in one of three forms in a business like <unk> five.

Speaker Change: First is simply constraint.

Speaker Change: Does that extend quite.

Speaker Change: Quite a bit of capacity says they run one shift only we can add shifts we cannot peoples has a lot of trained workforce in that area.

Speaker Change: Concerned on that part the other two elements come form supply of the components one is supply of the detectors.

Sam Rubin: The other two elements come from the supply of the components. One is supply of the detectors. Those detectors come from a single vendor that makes them. And for that extent, to get ahead of ourselves on knowing or expecting that this is going to happen, we actually place some very large orders for detectors with the vendor. Al was very unhappy about the amount of cash we tied up, but it's paying off in the fact that we're able to ship very quickly now some of those large orders. So I'm less concerned on that part.

Speaker Change: Detectors come from a single vendor.

Speaker Change: It makes them.

Speaker Change: And that extends to two gets ahead of ourselves on knowing or expecting that this is going to happen, we actually place some very large orders for detectors waves.

Speaker Change: Al was very unhappy about the amount of cash we tied up but it's.

Speaker Change: It's paying dolphins effects that we are able to ship very quickly some of those large orders.

Speaker Change: So I am less concerned on that path.

Sam Rubin: The second part is the optics. And this is where light path actually can come into play because optical G5 does not make its own optical components. It outsources them to other companies like light path and then coats the They have plenty of capacity for coating. We just bought another coating chamber for G5, just to make sure there's enough capacity. But the timeline of the lead time for getting the optical components can sometimes be long. And this is exactly the place where our Latvia operation, or even our London operation, can step in and potentially will do.

Speaker Change: The second part is the optics and this is where life off actually can come into play because the optical G. Five does not make it so and optical components.

Speaker Change: Outsourcing them to other companies like flight path and then coat the optics they have plenty of capacity for coating. We just bought another coating chamber for G. Five just to make sure there's enough capacity.

Speaker Change: But the capacity is the timeline of the lead time for getting optical components can sometimes speed.

Speaker Change: And this is exactly the place where our lottery observation or even Orlando operation can step in.

Speaker Change: And potentially Wilton.

Scott Buck: So short answer is I'm not worried about their capacity, but it's complicated, so there are a few things we're doing. Sure. No, that's very good color. I appreciate that.

Speaker Change: So long short short answer is I'm not worried about plate capacity.

Speaker Change: It's complicated so there's a few things we're doing.

Speaker Change: Sure.

Speaker Change: Very good color I appreciate that and I apologize if I missed this early in the call I jumped on a few minutes late.

Scott Buck: And apologies if I missed this early in the call. I jumped on a few minutes late.

Sam Rubin: Could you talk a little bit about integration on the sales side? Are you both out co-marketing, co-pitching at this point? And if not, when does that occur?

Speaker Change: Could you talk a little bit about integration on the sales side.

Speaker Change: Are you both our co marketing co pitching at this point.

Speaker Change: Yes.

Speaker Change: When does that occur.

Sam Rubin: Yeah, so actually, you touch on a point that I wanted to talk about in my notes and forgot to bring it up.

Speaker Change: So actually you touched on the point that I wanted to talk about it in my notes and forgot to bring it up our VP sales Jason Mr. Schmitz had last week had to resign immediately due to some personal reasons and his family.

Sam Rubin: Our VP Sales, Jaeson Messerschmidt, last week had to resign immediately due to some personal reasons in his family. And so that was very unexpected for us. We haven't talked about it publicly. This is really the opportunity to do so. We enjoyed very much working with Jaeson, regret it very much. We tried everything possible, but some family restrictions or family requirements led to that. And we wish Jaeson best of luck. He stays in touch with us and hopefully we'll get to work again together in the future. That said, we still have a very strong sales team in the camera side that Jaeson has built here in his year with us.

Speaker Change: And so that was very unexpected for us we haven't we haven't talked about it publicly this is really the opportunity to do so.

Speaker Change: We enjoyed very much working with Jason regret it very much we tried everything possible, but some family restrictions or family.

Speaker Change: Requirements led to that and we wish Jason Best of luck he stays in touch with us and hopefully we will get to work again to give it in the future.

Speaker Change: Does that said, we still have a very strong sales team that is the camera side that Jason has built here.

Speaker Change: This year with us.

Scott Buck: And that sales team is already working very closely with G5. And in fact, I myself spend some of my time on that. So sometimes, some doors that phone call or an email from the CEO can open. And so I also take part in having calls with new potential customers in order to open the door. And those are going very well. So we it will take time because the sales cycle is long on a capital equipment of this magnitude. For more information visit www.FEMA.gov But reactions so far are great. And we're absolutely seeing that the life of NAME and Salesforce can open for G5 doors that before, you know, never even were never even knocked on.

Speaker Change: And that sales team is already working very closely with <unk> five in fact I myself spent.

Speaker Change: Spend some of my time on that.

Speaker Change: So sometimes some doors that a phone call or an E mail from the CEO can open and so I also take part in having calls with new potential customers in order to open the door and those are going very well so.

Speaker Change: It will take time, because the sales cycle is long colony capital equipment of this magnitude.

Speaker Change: But reactions so far are great and we're absolutely seeing that the life of name and Salesforce can open for Gen. Five doors that before never even went up even knockdown really.

Scott Buck: Great. Well, I appreciate that.

Speaker Change: Alright, well I appreciate that that's all I had guys. Thank you. Thank you Scott.

Scott Buck: That's all I had, guys. Thank you. Thank you, Scott.

Brian Kinstlinger: The next question comes from Brian Kinstlinger of Alliance Global Partners, please go ahead. Great, thanks so much. I'm curious, Al, you mentioned there'll be some higher expenses. I'm not looking for a non-cash, but in the current quarter and possibly next quarter, can you just help set our expectation for how much that might be? It's going to be substantial is my guess. It's the ongoing legal fees. for obviously all the filings we're doing, audit fees that go beyond just audit, again for all the filings, the valuation. and consulting fees around that, right? Because we, you know, we're incurring those costs essentially in March and April and even, even this So we still have some, some trailing expenses.

The next question comes from Bryan Keane singer.

Speaker Change: <unk> Global partners. Please go ahead.

Speaker Change: Great. Thanks, so much.

Speaker Change: I'm curious.

Speaker Change: Al you mentioned there'll be some higher expenses.

Non amortization I'm not looking for a noncash but in the current quarter and possibly next quarter can you just.

Speaker Change: Instead, our expectation or how much that might be.

Speaker Change: Yes.

Speaker Change: It's going to be substantial is my guess.

Speaker Change: Ongoing legal fees.

Speaker Change: Obviously, all the filings were doing audit fees that go beyond just audit again for all the filings the valuation.

Speaker Change: And consulting fees around that right because we were incurring those.

Speaker Change: Those costs essentially in March and April and even even this week. So we still have some some trailing expenses.

Albert Miranda: that that are occurring right up to right up to his very Substantial, like a million or two a quarter. Not a million. That would be really substantial. I would guess 300 somewhere in that neighborhood. and then in December.

Speaker Change: That are occurring right up to the right up to this very minute.

Speaker Change: Substantial like a million or two a quarter.

Speaker Change: Nine 1 million.

Speaker Change: That would be really substantial.

Speaker Change: I would guess 300 somewhere in that neighborhood.

Speaker Change: Okay and then in December.

Speaker Change: Sure.

Albert Miranda: over the weekend. That's a great question. I'm glad someone pays attention when we talk, so I appreciate that. Things are much, much better. So on the yield issues and anything like that, we've done a lot of work and I think they're pretty much resolved. Touch wood, I don't want to, you know, promise, but as of now, we're seeing everything on track and going well. Supply issues were, you know, there was a gap of getting any materials out of China. Everyone was overreacting, as I sort of mentioned in my comments about these audits from customs and things.

Speaker Change: A lot is kind of open ended.

Speaker Change: And then in the December quarter, you highlighted yield issues and supply chain challenges.

Speaker Change: Certain components from China at what what's happening today post April.

Speaker Change: Are the yield issues.

Speaker Change: And then are you having any challenges on the supply chain right now.

Speaker Change: No thats great.

Speaker Change: Question I'm glad I'm glad someone pays attention when we talk so I appreciate that.

Things are much much better so on net yield issues and then if you'd like that we've done a lot of work and I think that.

Speaker Change: Pretty much resolved.

Speaker Change: Touch wood I don't want to.

Speaker Change: Thomas but as of now we're seeing everything on track and going well supply issues well.

Speaker Change: There was a gap of getting any materials out of China, everyone was overreacting as I sort of mentioned in my comments about these audits from customs and things.

Albert Miranda: I mean, there was a lot going on in China of customs scaring everyone out of exporting germanium to a point that many companies stopped exporting optical materials, period. And so it took a bit of time for the dust to settle and people to start exporting again. Of course, we re-routed any orders we can to suppliers outside of China, but the cost difference is sometimes such that we can't do so. That is pretty much behind us. Supply of non-geomanium optics is back on track. We're receiving most of those in the next few weeks. So within the quarter we're in now, we're hopefully going to clear away most of that backlog of items that had supply issues.

Speaker Change: There was lots going on in China of custom scaring everyone out of exporting germanium to point that many companies stopped exporting optical materials periods.

Speaker Change: And so to give enough time for the dust to settle and people to start exporting again.

Speaker Change: Course, we rerouted any orders, we can to suppliers outside of China, but the cost differences, sometimes such that we can't do that because that is pretty much behind us supply of non Joe mainly optics is back on track we are receiving.

Speaker Change: Most of those in the next few weeks. So we are in the quarter. We're in now we're hopefully going to flavor way most of that backlog of items that had supply issues.

Albert Miranda: Some might flow into July just because it will take us a bit longer to process, but most of that backlog of supply we're expecting end of May, beginning of June to receive the material.

Speaker Change: Might flow into July just because it will take a bit longer.

Speaker Change: Two process, but.

Speaker Change: Most of that backlog of supply we're expecting end of May beginning of June to receive the materials.

Okay.

Albert Miranda: Another question I had was, and maybe just me who misunderstands, the two contracts, the Border Security Contract opportunity for G5 and the Navy Vessel Contract, are those awarded? Are they still in competition? Just help me understand where those are in the procurement process. Yeah.

Speaker Change: And the other question I had was maybe just me who misunderstand.

Speaker Change: The two contracts the border security contract.

Speaker Change: <unk> four <unk> five and the Navy vessel contract are those awarded are they still in competition just help me understand where those are in the procurement, yes, yes, yes.

Sam Rubin: Navy competition is the simplest one. Awarded, sole source. program of record moving hopefully very soon into what's called LRIP, Low Rate Initial Production, and then it will be multi-million dollar a year from that point on. And that is a done deal.

Speaker Change: Nathan competition is the simplest one awarded sole source.

Speaker Change: And so that could moving hopefully very soon into what's called elevate low rate initial production.

Speaker Change: And then it will be multimillion dollar a year from that point in time.

Speaker Change: And that is a done deal border patrol is a bit more complicated. So border patrol has three suppliers of record for these kind of tablets.

Sam Rubin: Border Patrol is a bit more complicated. So Border Patrol has three suppliers of record for these kind of towers. Elbit of America, ATSC, and General Dynamics Lens. G5 is the sole provider for Elbit of America. As far as we know, of the three vendors, Elbit of America's system is the preferred system and performs the best overall, and therefore we expect the majority of the purchases to go to Elbit, and therefore from there to G5, which is the only vendor to Elbit. However, this is what is called an IDIQ, Indefinite Delivery, Indefinite Quantity, that is split up between three vendors, which means every year, all over again, Border Patrol can decide which one of the vendors gets what part of the key.

Speaker Change: Elbit of America, <unk> and general dynamics land systems.

Speaker Change: <unk> five is the sole provider for elevate of America as far as we know also free vendors Elbit of America system as a preferred system and performs the best overall and therefore, we expect the majority of the purchases to go to elevate and therefore from Seo to Gee.

Speaker Change: Five which is the only vendor to elevate. However, this is what's called an <unk> IQ indefinite delivery indefinite quantity that is split between free vendors, which means every year all over again border patrol can decide which one of the vendors get what part of the cake. So.

Sam Rubin: So there's very little certainty for the very long term. The only certainty we have right now is that we know from our own inquiries and discussions with Border Patrol. that the LVID system does by far perform the best. that right now, they're considering the next purchase, which should be starting in the next few months. And if it goes well, this will be a, you know, pretty large program for G. And this program has been ongoing. I mean, an IDIQ you don't have to ever order, right? I think it could be zero, it could be all the way up to the max.

Speaker Change: This is very little certainty for the very long term.

Speaker Change: The only certainty we have right now is that we know from our own inquiries and discussions and border patrol.

Speaker Change: That's elbit system does by far performed the best.

Speaker Change: That right now.

Speaker Change: Sales considering.

Speaker Change: The next purchase which should be.

Speaker Change: Starting in the next few months and if it goes well this will be a.

Speaker Change: Pretty large program for <unk> five.

Speaker Change: And this program.

Speaker Change: It has been ongoing I mean, 90 IQ you don't have to ever order right. They can be euro could be all the way up to the Max have they correct made several orders where <unk> is the market leader.

Sam Rubin: Have they made several orders where Melbitt is the market leader? The IDIQ started in January and in January, G5 received an order of a couple of million dollars for Melbitt for the first few systems. And we're expecting now, and those were sort of the I'd say equivalent to LVIP, because it doesn't exactly, Homeland Security doesn't use that same terminology. But the next few months is when the real deliveries from IDIQ are going to start. And you're absolutely right. IDIQ has a lot of, you know, uncertainty in it in terms of what will actually be pulled out.

Speaker Change: <unk> started in January and in January.

Speaker Change: <unk> received an order of a couple of million dollars for metal a bit for the first few systems.

Speaker Change: And we're expecting now.

Speaker Change: Those were sort of the.

Speaker Change: I would say equivalent to elevate because it doesn't exactly homeland security doesn't use the same terminology.

Speaker Change: But the next few months as Windsor vehicle deliveries from Q.

Speaker Change: Q <unk> will get a stop and you're absolutely right <unk> has a lot of.

Speaker Change: Uncertainty in it in terms of.

Speaker Change: What will actually be pulled out of it.

Albert Miranda: Okay, and my last question is based on the backlog for G5, how far along are they into their at least revenue contribution of meeting their targets for next year? What's the visibility on that? I think they have all together between what they shipped so far and book to maybe 15 million, maybe higher a bit. I'm not sure. Do you have that? I do. You want me to say it? Roughly, yeah. So between what they've shipped, well, through let's say through Q4, because we have some visibility there, through the end of the year, through February 18.

Speaker Change: Okay and my last question is based on.

Speaker Change: The backlog for <unk>, how far along are they into there at least revenue contribution meeting their targets for next year, what's the visibility on that.

Speaker Change: I think that they have.

Speaker Change: Altogether between what the shift so far in book to maybe $15 million, maybe high ever been.

Speaker Change: Do you have do you want me to say.

Speaker Change: Roughly.

Speaker Change: <unk>, what they've shipped well through let's say through Q4, because we have some visibility there.

Speaker Change: Through the end of the year through February 18th right now its 19.

Albert Miranda: Right now, it's 19. and just remind me where they have to get to to hit their hit their first or now first or the first earn out is 21 Okay, and thank you so much we projected. I mean, I just earlier on the call, you know, I said, they're, you know, we're going to do 51 in total for the year. That assumes that they make at least that. or for the trailing 12. So they're on course to do, revenue-wise, exactly what we thought. And there's still upside opportunities there. So they can order their reach their their in order to reach their payout or contingent payment, they have to hit the margin to on top of the revenue.

Speaker Change: And just remind me what do they have to get to to hit their hit there.

Speaker Change: First we're now first the first earn out is 21.

Speaker Change: Got it.

Speaker Change: Okay.

Speaker Change: Thank you so much we projected.

Speaker Change: Earlier in the call I said, there are going to do 51 in total for the year that assumes that they make at least that 'twenty one.

Speaker Change: Yes.

Speaker Change: Trailing 12, sorry.

Speaker Change: There are they're on they are on course to do revenue wise exactly what we thought.

Speaker Change: And there is still upside opportunities there.

Speaker Change: So we couldnt order to recur there.

Speaker Change: In order to reach their payout or contingent payment they have to hit the margin too on top of the revenue is that right.

Albert Miranda: 20% on the the their standalone business has to do 20% EBITDA, not the white path in total, but them. Right. Is there anything to tell you so far that that's not tracking? Oh, you only have five weeks of data. Come on, Al. Okay. No, but I don't see any red flags, Brian. I don't see any red flags. Let's just say, Ernaut is a great motivator. I mean, it's, you know, it's ambitious even for them, right? It's not a cakewalk, even for them, but it's completely doable.

Speaker Change: 20%.

Speaker Change: They're standalone.

Speaker Change: Loan business has to do 20% EBIT.

Speaker Change: Bypass in total but that Microsoft.

Speaker Change: Alright.

Speaker Change: I'd tell you so far that that's not tracking.

Speaker Change: We only have five weeks of data.

Speaker Change: Yeah.

Speaker Change: Al.

Okay.

Speaker Change: I don't see any red flags, Brian I don't see any red flag, let's just say earn out as a great motivator.

Speaker Change: It's ambitious even for them right.

Speaker Change: Cakewalk even for them.

Speaker Change: But it's completely doable.

Albert Miranda: Okay, thanks.

Speaker Change: Okay. Thanks.

Operator: Thank you.

Speaker Change: Thank you.

Speaker Change: Yes.

Operator: Ladies and gentlemen, we have reached the end of our question and answer session.

Speaker Change: Ladies and gentlemen, we have reached the end of our question and answer session I will now hand back to Sam prevent for closing remarks.

Sam Rubin: I will now hand back to Sam Rubin for closing remarks. Thank you, everyone. As you can tell, exciting times. We're getting it done. Everything we've been talking about for the last few years is all falling into place and happening. We're excited. I jump out of bed every morning coming to work. And so we're very much looking forward to continue to update everyone. Thank you for coming. Thank you, sir.

Speaker Change: Thank you everyone as you can tell exciting times.

Speaker Change: Getting get dumped everything we've been talking about for the last few years is all falling into place and happening.

Speaker Change: We're excited I jumped out of bed every morning coming to work.

Speaker Change: And so it will very much looking forward to continue to update everyone. Thank you for coming.

Speaker Change: Sure.

Speaker Change: Thank you, Sir ladies and gentlemen that concludes today's event. Thank you for attending and you may now disconnect your lines.

Operator: Ladies and gentlemen, that concludes today's event. Thank you for attending, and you may now disconnect your... © BF-WATCH TV 2021 © BF-WATCH TV 2021

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