LightPath Technologies, Inc.

Good afternoon and welcome to the LightPath Technologies Fiscal 2022 Third Quarter Financial Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal the conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Albert Miranda, Chief Financial Officer. Please go ahead.

Thank you. Good afternoon, everyone. Before we get started, I'd like to remind you that during the course of this conference call, the company will be making a number of forward-looking statements that are based on Current expectations involve various risks and uncertainties, including the impact of COVID-19 pandemic, those discussed in its periodic SEC filings. Although the company believes that the assumptions underlying these statements are reasonable, any of them can be proven to be inaccurate, and there can be no assurances that the results would be realized. In addition, references may be made to certain non-generally accepted accounting principles or non-GAAP measures for which you should refer to the appropriate disclaimers and reconciliations in the company's SEC filings and press releases. Following the management's discussion, there will be a formal question and answer session open to participants on the call. I would now like to turn the conference over to Sam, LightPath's President and Chief Executive Officer.

Thank you, Al. Good afternoon to everyone, and welcome to LightPath Technologies' fiscal 2021 third quarter financial results conference call. Our financial results press release was issued after the market closed today and posted at our corporate website. I want to start today's call by providing you a brief update on our company and the vision we have for the future of the business. The area of optics and photonics is at a truly exciting inflection point. Technological advances have made solutions in optics and photonics available and applicable to products and services in a wide variety of industries. Optical solutions are now applicable to products in LIDAR, drones, augmented and virtual reality, medical field, sporting and consumer goods, to name a few. An example of one such application is LIDAR for autonomous drones, for which we recently announced a collaboration with Apollo Engineering. We believe that when a technology like photonics moves from being a speciality technology to being integrated into mainstream industries and applications, our advantages and domain expertise make us an ideal partner for providing the optical engine of our customers' systems. Owning the critical differentiating technologies, such as unique materials, high-volume molding technology, free-form optics, and others position us to both create unique value for those customers and capture that value in the form of stronger profit margins and long-term agreements, engagements with our customers. Photonics can be embedded in products across many industries, and it is estimated to represent as much as 11% of the global economy. The integration of photonics into mainstream products provides us with built-in product and customer diversification opportunities. In the past, Lightpath was primarily focused on components within the manufacturing supply chain. That strategy was designed around the premise that photonics is not widely adopted, and therefore the supply chain was highly fragmented and specialized. Today, with the accelerating adoption of photonics into many applications and industries, our industry is moving, our strategy is moving away from being simply a component provider to a company focused on providing optical engineered solutions. This means designing and integrating optics, mechanics, electronics, and software to provide the complete optical engine to the customer. We are positioning LightPath to be the partner of choice in this exponentially growing field of optics and photonics. By focusing on our key differentiators, including our design and manufacturing expertise, enabled by key optical technologies, low-cost and vertically integrated global manufacturing, we believe we can be a leading OEM to customers across the globe. One area where adoption of photonics is accelerating is the growing need and benefit of infrared imaging. Improvements in infrared imaging are opening up new applications to an existing technology across shortwave, midwave, and longwave infrared imaging. Further applications are being applied in border surveillance, drones, maritime and coastal surveillance, and critical infrastructure projects. Infrared imaging has, for the most part, been based on the use of germanium as the optical material. However, germanium comes primarily from China and Russia, with the US importing as much as 95% of the germanium it uses. An alternative to germanium is chalcogenide glass, which we name black diamond glass. Through our ongoing production of our black diamond six-glass PD6, we have gained over the last few years significant experience in making and using those materials, positioning us as probably the lead manufacturer for this kind of material in the U.S. Further, receiving the exclusive license to commercialize further chalcogenide glasses developed by the Navy Research Lab, positions us as the only true source for a portfolio of materials that provide an alternative to germanium. To that end, I recently traveled to Washington DC to give a talk about the subject, followed by meetings with DOD and government officials on the topic. We are beginning to see that owning this key technology is well aligned with the growth of infrared imaging. in the efforts to build a resilient and robust supply chain in the U.S., an important effort that is further emphasized by the recent geopolitical events, all of which reinforces our strategy and indicates that we are in the right place, in the right time, and most importantly, heading in the right direction. To reiterate this, it is owning critical technologies that positions us to capture much of the value in those growing markets. The essence of our strategy revolves around technologies that are critical to the implementation of optical system in those areas and leveraging those to develop and deliver optical systems and subsystems that produce better infrared images with an overall lower cost of ownership to the customer. Even as commercialization is happening more broadly, there remains a large addressable market for government and military applications. Our unique technology and expertise with producing and processing the infrared materials, including fabrication of the components and assemblies, lower-cost manufacturing in our ITAR-approved facility in Latvia, and technological advancements like our diamond-like carbon DLC coating process which has been qualified for all U.S. military applications, places us in a leading position in this market. We believe our valuable position makes us an increasingly important partner to commercial development of engineered solutions for Department of Defense agencies, Defense Industrial Base, BIP, prime contractors, and other infrared optical imaging businesses. In October 2021, we announced our entry into the Freeform Optics Surveyor. Freeform Optics involves lenses with surface shapes that lack certain symmetrical attributes, which makes them more challenging to mass produce, but provide improved aperture, field of view, and miniaturization. Freeform optics are becoming a key element in applications such as augmented and virtual reality, AR and VR, infrared and military optical systems, and 3D imaging and visualization. Many times, these systems require the higher performance and more compact form factor that freeform optics can provide. allowing increased flexibility and overall size, weight, and power optimization. The qualities of the material used are the key to producing smaller and lighter augmented and virtual reality glasses that look more like conventional eyeglasses and less like the bulky AR-VR goggles of today. Additionally, with free-form optics, LIDAR systems can achieve larger field of views and lower losses which in turn translate to higher resolution images and the ability to extend detection distances. The adoption of free-form optics in such applications has been limited due to the manufacturing technologies that previously made mass commercialization cost prohibitive. We believe that our technology solves for that. In January of this year, we announced that our Freeform Optics won the 2022 Prism Award for Manufacturing, which is an annual international competition that honors the best optics and photonics products on the market. In March, we announced that Apollo Engineering chose our Freeform Optics for use in its LIDAR products. Apollo's line of laser rangefinders and LIDAR products provide fast measurement with high accuracy and precision. in an ultra-compact package. We integrate our molded free-form optics in their systems, which allows them to achieve optimum performance while minimizing the number of optical components. Our free-form optics reduce the cost and weight of their system. At the same time, we continue working with more customers on developing free-form optics for their applications and continue working on eight large, high-opportunity applications, which are in different stages of development and qualification. This is truly an exciting time to be working in photonics and optical solutions. We believe the application of the technologies we use will continue to grow as costs are reduced and product acceptance increases. We're really excited about the progress the company has made and the direction we're going in. We have endured several hurdles over the past year or two, but believe that we are on firmer footing now, and we're at the point where applications for our technology solutions are beginning to be more mainstream. I will also provide a brief update on the ongoing situation in China before making concluding remarks. As we have mentioned before, although we have taken steps to minimize the business impact from the termination of the previous management employees and transition to new management personnel in our China subsidiary, we have experienced some short-term adverse impact on domestic sales in China and the results of operations in the three-month period ending June 30th, 2021, and the nine-month period ending March 31st, 2022. These adverse impacts have significantly declined, yet management anticipates they may still have some effect in the next quarters. Domestic sales in China are also being impacted by COVID-19-related shutdowns, which have not directly impacted our factory, but have impacted the operations of some of our Chinese customers. Lastly, I would like to thank all LightPath employees and stakeholders who are working every day to grow the business and achieve breakthrough products and technologies. This concludes my prepared remarks. Now, I will pass the call over to Al Miranda, our CFO, to review financial results for the first quarter.