LightPath Technologies, Inc.

Good afternoon, everyone, and welcome to the LightPath Technologies Fiscal Third Quarter 2023 Financial Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a 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. At this time, I'd like to turn the conference over to Al Miranda, LightPath's Chief Financial Officer. Please go ahead, Al.

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, as 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 projected results would be realized. In addition, references may be made to certain financial measures that are not in accordance with generally accepted accounting principles or GAAP. We refer to these as non-GAAP financial measures, please refer to our SEC reports and certain press releases, which include reconciliations of non-GAAP financial measures and associated disclaimers. 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 formal 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. Good afternoon to everyone, and welcome to Lightbox Technologies' fiscal 2023 third quarter financial results conference call. Our financial results press release was issued after the market closed today and posted to our corporate website. As we expected would happen to some degree, shipments in the third fiscal quarter of 2023 were impacted by the ongoing construction and expansion of our Florida facility. And while we planned and expected for some disruption from the move and expansion, this resulted in between a million to one and a half million of products that was not shipped in the quarter. Those orders, however, are not lost. and their shipment moved into Q4, the current quarter we're in. Completing that construction will position the company for larger, more sophisticated orders, a growth that is backed by a strong backlog and continued booking and customer commitment. In prior quarterly calls, we discussed LightPath's strategic shift from a component manufacturer to a value-added solutions provider. To discuss this further, I'd like to use a framework of talking about three pillars of growth as I started communicating in recent months. Some of those points we've discussed previously. The complete understanding is important. The three pillars of growth we look at are the shift to the solutions business, the increase in defense business driven mostly by our new materials, and the new high-volume markets, primarily automotive. While the latter two growth pillars are market and application driven, the first, the solution approach, is a strategic in nature and in many ways ties into and enables the two strong growth segments. Our solution business defines the first part of our growth strategy. The solutions business is built on leveraging unique capabilities we have and continue to develop to provide customers with solutions engineered to their exact needs that solve problems that either current solutions don't solve or are too expensive. Over the last few years, in setting the strategic direction in place, we have been executing it in the level of lens assembly. Instead of selling individual lenses, offering and delivering assemblies that include multiple often designed to specific customer requirements. Today, about 20% of our backlog of future deliveries is comprised of such lens assembly. In addition to this organic expansion into assembly, in December 2022, we announced our first imaging product. More than just a lens assembly designed for a specific detector, our Mantis imaging modules is a unique combination of a special lens assembly together with a modified microbilometer array detector to deliver multispectral infrared camera. The Mantis multispectral infrared camera not only provides customers with more advanced imaging system, one that images in more than one spectral range, but also demonstrates the next level of offering from LightPath. integrated optical systems with imaging electronics to deliver cutting-edge infrared solutions. While our intention here is not to be a manufacturer of a line of off-the-shelf infrared cameras, we have developed a camera product as an example and design reference that will be the basis of customized OEM modules for integration for specific applications. This approach is somewhat different than the organic growth into solutions so far. In a way, we have built a hammer that demonstrates unique and advanced capabilities and are now working closely with our customers to uncover the right nails that would benefit from this hammer. So far, we have seen strong interest and reception in the market to the unique capabilities of an imaging solution like Mantis. Those include a number of applications in the defense space, as well as commercial uses, such as sorting plastic and recycling, fire detection, and more. It is clear to us that a need for such an imaging solution exists, and that some applications and customers were simply waiting for such a solution to appear at the right price point. Instead of a $100,000 cryogenically cooled camera that was the only option until now, we are now offering a solution for an order of magnitude less. Over the last few months, our camera has been tested and evaluated in a number of applications and has especially received significant attention with some groups inside Department of Defense. We're very encouraged by this and believe it will lead to significant OEM business of customized solutions. Also, in addition to working with customers on their applications, we developed some unique technologies around this, for which we have been applying for patents. In the last few weeks, we have applied for more patents than the company has in the last 10 years combined, representing a significant buildup of unique IPs. The second pillar of our growth revolves around defense and leveraging our unique infrared materials. This is in addition to any defense business I discussed in relation to the camera. The defense industry, whether in the U.S. or Europe, has been using infrared optics for a long time. Label supply chains already exist, provide primes and subprimes with the optics and optical systems they need. To achieve significant growth and a market share in such an established market while commanding a premium, LightMath is leveraging its unique and exclusive materials for infrared imaging as an entry point into new programs and to become the supplier of choice for infrared optics in the aerospace and defense industry. The advantages our materials provide are twofold. First, it is an alternative to using germanium for infrared optics. The DoD and White House identified germanium as a strategic vulnerability within the supply chain. With most of the germanium originating from China and Russia, it is of strategic importance to have alternatives. We have been working with the DoD and various government agencies to accelerate the qualification of our new materials. Most of this work is funded directly by those agents. Secondly, our materials provide additional advantages over Jomanium, primarily in complex imaging systems. A good example to that is our own Mantis camera, which could not be made possible if we were to use only Jomanium. While new defense contracts can take a significant amount of time to come to fruition, we are seeing very positive lead indicators to the success of this strategy, as well as some faster wins evident in our backlog. The first part of our growth strategy concerns adoption of thermal imaging, or infrared imaging in general, in more applications, and right now primarily with a focus on automotive. Independent of some of the other activities and advancements in the automotive world, such as LiDAR, multiple car companies are working towards the integration of thermal imaging as another safety sensor in their systems. Primarily, we are seeing this in relation to automatic braking systems and adding additional safety features. We are in different stages of development and testing with various players in this field. And while each one has different timelines, different use cases, and different projections, one player stands out in our pipeline. And that is a major car company out of Detroit that has already fully qualified our product. Put this into the right perspective. Though we obviously do not expect to win all the opportunities on our plate, neither all of them necessarily turning into final products, with a price tag of between $20 to $50 per assembly, and with tens of millions of new vehicles hitting the road each year, It is enough for us to win one or even two major accounts for this to be transformational for our company. Last, since we completed the equity raise in January, we have accelerated construction on expanding our Florida facility. The purpose of this construction was to increase our facility capacity and capabilities. We're excited to have this construction phase behind us as we are now back at full capacity and expect the next construction phase to be completed in the second half of the calendar year. With our facilities increased capacity, we will soon look to add capabilities which we can see coming from both organic and inorganic development. As always, I would like 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, patience, and hard work. That said, I will now turn the call over to our CFO, Al Miranda, to review our third quarter financial results. Al?