LightPath Technologies, Inc.

Good afternoon, everyone, and welcome to the LifePath Technologies Fiscal First Quarter 2024 Financial Results Conference Call. Please note that today's event is being recorded, and at this time, I'd like to turn the floor over to Al Miranda, LifePath'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 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 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 of our press releases, which include reconciliations of non-GAAP financial measures. 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 CEO.

Thank you, Al. Good afternoon to everyone, and welcome to LightPath Technologies' physical first quarter 2024 financial results conference call. Our financial results press release was issued after the market closed today and posted on our corporate website. The first quarter was highlighted by our acquisition of Visamid, and with it the win of a significant project for an imaging engineered solution. Both are significant steps in our strategic shift from a component manufacturer to a value-added solutions provider. To recap for our investors, Lifepath has been transitioning in the last few years from a pure component manufacturer focused on being the lowest cost provider to a value-added partner for complete solutions based on optical technologies. whose differentiators are mostly based on technology. Along those lines, we have been focusing on three pillars of growth, imaging solutions as a strategic shift, such as cameras, growth in new markets, such as automotive, and specifically growth in our market share of the defense business. All three pillars of growth tie into and support our transition from a components manufacturer to provider of engineered solutions based on these proprietary technologies. This transition began a couple of years ago, starting from customized lens assemblies, which are what we call today Lightbar 2.0, through camera solutions, or Lightbar 3.0. The first of which was our innovative Mantis broadband infrared camera, which we announced in December and which enables new applications and capabilities for our customers. The latest step in this transition is acquisition of Vizimid Technologies. Vizimid Technologies, a small engineering firm based out of Dallas, Texas, does the back end of thermal cameras and does what LightPath has been doing for the front end of those same cameras. LightPath has been tailored tailoring and customizing the optics for cameras based on our optical technologies, and Vizimid has been customizing and tailoring the video processing engine and support electronics for the same cameras, or similar cameras. Like LightPath's business model of customizing optical assemblies to be used in infrared cameras, Vizimid has established itself as a go-to for customizing the electronics and software part of uncooled infrared cameras. In fact, our relationship goes back a bit, where Visamid has customized four LightPaths, electronics and software, for our Mantis camera prior to the acquisition. Together with Visamid, LightPath can now extend our offering of customized imaging solutions to include wholly integrated camera modules, increasing the offering to existing customers and providing us a bigger share of those customers' bill of materials. Shortly after the acquisition of Visamid, Lockheed Martin, a major prime contractor in the defense world, awarded Visamid and Lightpath a major project for the design, development, and later on manufacturing of a complete camera module for a new project in their missiles division. With the award came what will be up to $7.5 million of development work over the next three years. However, the real significance of this award lies in what will come after the development is completed. Once in production, we will produce this device in volume, estimated at tens of thousands of units over the program lifetime, and with an ASP for LightPath of thousands of dollars per unit. I will let that sink in a second. Thousands of dollars per unit, tens of thousands of units in the program. This is a major achievement for Lightpath and Vizimid and can be very, very significant for our future. The decision of this prime to outsource the development of such an important part of their system has been at first purely due to Vizimid's technical capabilities. However, their decision to then engage with us at the scale they are now engaging and the potential manufacturing of these units in volume is really due to the combination of LightPath and Vismit, bringing our manufacturing capabilities, capacities, and most importantly, ability to produce and integrate the entire subsystem. And while our strategy in having three pillars of growth are designed such that we don't put all our eggs in one basket or one product, this award by a major prime with this massive potential for revenue on the manufacturing side is seen by us as a big win to our strategy and this execution of that through the acquisition of Vizimid. So this was one significant development that touches on two of our pillars of growth, the defense industry and the integrated engineered solutions. In other areas, we continue to make progress, some at a better pace, others less. In the automotive market, we continue to work with new potential customers for the integration of thermal imaging into safety systems, and specifically emergency braking systems. Though we have not had any significant development in the area since our last call two months ago, We do note that some of the timelines of our end customers, meaning the automotive companies themselves, might be impacted by what seems like a possible slowdown in the EV market. Though we do not have anything specific to report on this, we do expect that some of the rollout might get delayed by a year or more with some of those customers, as they adjust to their own rollout of new modules and the start date of these new systems. During the last two months since our September call, we have continued to make progress on some of the new offerings in our camera or solutions area of growth. Applications for our Mantis camera continue to garner interest, and we are actively engaged with several customers at developing versions specific to their use cases. For example, in industrial monitoring of high temperature processes and more. Our innovative use case of flame detection using our Mantis, which I mentioned in the last call, is now being actively evaluated by customers with the goal of first proving the value proposition of this technology before we dive into building specific tailored solutions for their exact use case. The plastic recycling applications we had previously discussed is taking longer than expected due to the complexity of the integration of what is called technically a hyperspectral system. We still expect this to be a valuable application, but developing it would require a partner that will do the heavy lifting on the software development side. The third pillar of growth is the defense market, and specifically around our unique black diamond materials and their use as an alternative to germanium. This is on track as we continue to move forward with qualifying our new materials and having them integrated into DoD projects. Noted in this area is the renewal of an order we announced in beginning of October. That $3.4 million order is one of the first projects we know of in which germanium was designed out purposely. Similar to that, we have other projects in which systems are being redesigned to reduce or completely remove germanium. In some cases, we are involved or even do the actual redesign work. In other cases, we know of customers working on this and are collaborating with them to expedite it as much as possible. On that same topic, we note that while the exports of germanium have finally resumed out of China, the process to receive export license in China is cumbersome and also seems to vary considerably between different vendors and different export ports in China. With that in mind, we have decided to try and reduce our own exposure to this by reducing our own work on components made of germanium for customers. As a reminder, among other things, we produce custom components in which we optically machine or form lenses out of germanium. We have already communicated to customers proactively that we will be reducing our offering of components made from germanium, and we continue to work with those same customers at designing and developing alternatives made of our own materials. We expect that this might have a short-term impact on our infrared component revenue, as we discontinue some germanium work and gradually replace it with new work. However, our defense revenue continues to grow, particularly in the U.S., but non-defense revenue continues to be soft in China and somewhat softening in Europe. It is further exaggerated by the germanium supply and decisions around that. We are seeing slowdowns and delays in non-defense sector globally and anticipate continued softness for the next few quarters in those segments specifically. World event and economics playing out confirms our decision to focus on defense and on solutions and assemblies. To conclude, our shift in strategic direction is beginning to show the results we're looking for, both in winning some major programs and in revenue growth in that area. Al will talk about our new product classification and how we will now communicate the new product grouping to support the strategy. At the same time, our three separate areas of growth, solution, defense, and automotive, continue to generate multiple independent large-scale opportunities that many of them have the potential for tens of millions of dollars of new revenue. resulting in what we feel is a healthy pipeline of large-scale opportunities that any of them alone can be transformative and have a significant positive impact on our business. As always, I'd 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 they grow in company because of their dedication, patience, and hard work. With that in mind, I will now pass the call on to Al and with CFO to review first quarter financial results. Albert.