LightPath Technologies, Inc.

Good afternoon, and welcome to the Light Path Technologies Fiscal 2023 First Quarter Financial Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal 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 one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I'd 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 that is discussed in our 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 reconciliation in the company's SEC filings and press releases. Sam will begin today's call with an overview of the business and recent developments for the company. I will then review financial results for the quarter. Following our prepared remarks, there will be a format question and answer session. I would now like to turn the conference over to Sam Rubin, LightPath's president and chief executive officer.

Thank you, Al. Before I begin, I'd just like to inform everyone that due to internet shortage in Orlando, or internet outage, we're on cell phones, so excuse us if there's any quality issues with the audio. So, good afternoon to everyone and welcome to LifePath Technologies Fiscal 2023 First Quarter Financial Results Conference Call. Our financial results press release was issued after the market closed today and posted on our corporate website. As can be seen from our sales number for the quarter, life paths this quarter faced multiple headwinds, starting from Hurricane Ian affecting our shipments in the last few days of the quarter, a slowdown in China, and the war in Ukraine. The hurricane was sufficiently intense to force LifePath to close operations at our Florida facility for the last three days of the quarter. The facility closure resulted in a delay in shipments, which impacted revenue for the last week of fiscal 2023 first quarter. An initial assessment is that the fiscal first quarter revenue could be negatively affected by 400 to $700,000 due to delayed orders shipping, all of which have simply shifted into the following quarter without losing any of this revenue. The past quarters, we have acknowledged a slowdown in China's economy, affecting demand for lightfast product. The first fiscal quarter of 2023 saw a continuation of this trend, with demand in China lagging. As mentioned in our record backlog disclosure earlier this quarter, demand has been picking up significantly in other regions for future shipments starting in one to two quarters. But that is not yet visible in our sales numbers for first quarter of the fiscal year. Sales inside China for this quarter represented roughly 13%, that is 1.3% of Lightpath's revenue for the quarter. That is down from about 30%, 3.0% in fiscal 2022. We have, however, began preparing for this day for a while now. And as a reminder, shortly after I joined in 2020, we conducted an in-depth strategic analysis and have concluded that the pure component play is not sustainable for us and that market is getting too crowded. Since then, we have been plotting a new course and moving away from our dependence on components and putting our resources and growth elsewhere. in particular in infrared optics and in added value-engineered solutions. And while we did not expect sales of components in China to shift so quickly, the combination of the lockdowns in China, the economic stagnation, and the geopolitical events have accelerated this shift, proving to us that our new strategic direction, which we began implementing two years ago, is the right direction for us. Now, having said that, I do want to revisit where LightSparf is going. In the past few quarters, we discussed our transition to a provider of optical solutions from a manufacturer of components. We have significant engineering and product knowledge built up over the years to provide our customers with sufficiently compelling solutions for them to partner with us. Product development will be critical in our transition to a solutions provider. We continue to make substantial progress in that business transition and are excited about what we will announce in the coming weeks and months. Last quarter, we discussed our domestically produced black diamond glass as central to our transition to solution provider. These materials make a cheap domestically produced product and allow new applications such as multispectral imaging. These are obvious benefits over traditional crystalline infrared materials like germanium, which is largely sourced from China and Russia. Over the last year, we have been collaborating with different government agencies and key customers on advancing our black diamond glass and moving into production some of the new materials we have developed based on the license from Naval Research Laboratory. This morning, for example, we announced that our flagship black diamond material, named BD6, passed radiation testing and is being qualified for use in space. This is part of a project financed by the European Space Agency and announced by us about a year ago. Similar to that, we have ongoing projects and commitments from different government agencies, primarily in the DOD, Department of Defense, for the integration of our materials into new systems, both for superior performance and to reduce the dependence on germanium. Expect LifePath to announce developments of new solutions leveraging the potential of our black diamond materials, which allow our customers to achieve results representing leaps forward in optics in the coming weeks and months. While we look forward to exciting news on the product development front, we are also seeing exciting developments on the business front. We announced that Lightbar reached a $24 million backlog in August. While backlogs fluctuate over time, we see them as the best indicator for future revenue. At the end of the first quarter, our backlog remained near historically high levels at 23 million. Looking deeper at the backlog, we see some beneficial trends. The backlog is more skewed now towards defense and commercial customers in U.S. and Europe than it has ever been before. Additionally, the backlog remains comprised of a significant portion of solution-oriented orders, the bulk of which are scheduled to begin deliveries in our third and fourth fiscal quarters of this year. I have previously spoken also about the number of key opportunities we're working on. that involve new technologies and products, and each one of those opportunities could potentially be a 10% or more customer. Along those lines, I would like to update that while a couple of those opportunities have fallen through, three of the opportunities have completed customer qualification and are awaiting customer production orders. While two of the opportunities have grown further than our initial expectations, and representing our opportunities that could each be a game changer to our revenue. We will continue to update on those and hopefully be able to announce soon the transition of some of those into production. Despite some external headwinds and near-term cost pressure, the company's outlook and growth prospects are extremely bright. Our black diamond glass, as well as many other technological innovations, have the potential to revolutionize our product portfolio and are beginning to do so already. We are actively developing solutions built on that platform to provide a complete engineered solution that was impossible or much harder to achieve before. I want to thank our employees and stakeholders who have continued to work diligently through the various transitions and hurdles we have endured. We see a bright future and growing company because of their dedication and hard work. And with that, I will now turn the call over to our CFO, Alan Miranda, to review our first quarter financial results.