LightPath Technologies, Inc.

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to LightPath Technologies Fiscal First Quarter 2026 Earnings Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. This conference is being recorded today, November 11, 2025, and the earnings press release accompanying this conference call was issued after the market closed today. 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 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 could be no assurances that the projected results will 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 non-GAAP financial measures. Please refer to our SEC reports in certain of our press releases, which include reconciliations of non-GAAP financial measures and associated disclaimers. CEO Sam Rubin will begin today's call with a strategic overview of the business and recent developments for the company, while CFO Al Miranda will then review financial results for the quarter. Following the prepared remarks, there will be a formal question and answer session. I would now like to turn the conference over to CEO Sam Rubin. Sam, the floor is yours.

Thank you, Operator. Good afternoon to everyone, and welcome to another exciting quarterly update from LifePath Technology for our fiscal first quarter 2026 financial results. LightPath is entering a clear inflection point. After several years of disciplined execution to transform our business from a component supplier into a vertically integrated provider of high-value infrared optics and camera systems, we are now seeing that strategy translate into measurable commercial success. The progress we have made is reflected in record orders, a growing systems backlog, and increased customer adoption of our technologies. Since we likely have a growing base of shareholders and with them likely more new listeners on this call, I will take some time to describe where we have come from, which will help put in context the recent developments. Then I will talk about specific programs that are driving our record backlog, the strategic investment from ONDAS and unusual machines, and upcoming growth drivers. For decades, LifePath was known primarily for its precision optical components. As the photonics industry matured, the dynamics shifted, margins compressed, competition intensified, and value migrated up the food chain towards engineered subsystems and full systems. particularly in infrared imaging. Recognizing this, we realigned our strategy, beginning in late 2020, to move up the value chain, integrating our proprietary materials and design expertise into complete imaging systems where we could capture more of the value we create. At the center of this strategy is our proprietary black diamond chalcogenide glass, which we license exclusively from the US Naval Research Laboratory. as a domestic alternative for germanium for use in infrared imaging. Black Diamond enables us to produce infrared optics that are lighter, more affordable, and most importantly, secure from supply chain disruptions, following China's restrictions on germanium export earlier this year. By pairing this material leadership with the advanced infrared camera technologies gained through acquisitions of G5 infrared and vis-a-mit technologies, LightPath has become the only pure play company offering fully integrated infrared systems designed and manufactured in the West. LightPath has a sweet spot of going into subsystems or small systems, which we often call engineered solutions. Those do not require large infrastructure of service and support as full systems do. but still allow us to capture much more value. The combination of light-mass materials and optics with our recently acquired subsidiary of G5 infrared, which is an industry leading in cameras, is a case in point. G5 is known as the industry leader for long-range infrared cameras. That was the case before we acquired them, not something we created. Like all of their competitors, G5 was facing supply chain challenges due to global geopolitics, and primarily germanium and gallioth, which are critical materials in their systems. After acquiring G5 in conjunction with their team, we began an effort to redesign their systems to use our proprietary black diamond materials. By doing so, we are positioning ourselves now not only as offering the best cameras, but as the most reliable provider of cameras, with supply chain resiliency that no one else can offer. And in August, we introduced the first germanium-free G5 camera variant, utilizing our black diamond glass. These redesigned systems represent the first wave of a broader transition across our G5 camera portfolio. and addresses a critical need among defense and industrial customers to eliminate reliance on Chinese-controlled materials. Around the same time, we announced two significant orders for our advanced infrared cameras, an $18.2 million order for deliveries in calendar 2026, and shortly after, a follow-on order for $22.1 million for deliveries in calendar 2027. Combined, these represent more than $40 million in contracted revenue, reflecting both the strength of the underlining demand and the growing confidence in our ability to deliver. G5 is a prime example of the values that we can derive from thoughtful acquisitions, being on track to double in size since the acquisition, with several strategic benefits, such as the implementation of Black Diamond in their cameras. Visamid was another fantastic example, bringing us the NGSRI missile program with Lockheed. I continue to believe that leveraging our strong industry knowledge and expertise for strategic M&A will continue to be an important tool in our arsenal going forward. As when we acquire a company, the resulting value is often far, far more than the sum of the parts. Last quarter, we also announced a strategic $8 million equity investment from Ondas Holding and Unusual Machines during the quarter, two key partners driving the domestic drone ecosystem. Their investments are intended to help accelerate our commercialization roadmap, particularly focusing around uncooled infrared solutions for drone applications. Beyond the financial contribution, this partnership also underscores LightPath's strategic relevance in the reshoring of advanced optical and imaging technologies to the US and Europe. Altogether, these developments have driven our backlog to approximately $90 million, more than four times the levels of just a few short quarters ago. Importantly, more than two-thirds of this backlog is now in systems and subsystems, validating the success of our move up the value chain. The mixed shift towards systems not only expands our margins, but also deepens our relationship with customers who rely on Lightpath for critical capabilities and supply assurance. With this background behind us, I would like to dive into some of the most recent wins and add some color and background on the announcements we have recently made. Several programs continue to anchor our near-term growth. Border surveillance and counter UAS applications, our long-range zoom cameras, are being deployed across a wide variety of platforms, including mobile and stationary systems designed to detect, classify, and track threats. In fact, more than 15 million of our current backlog is for counter UAS applications. Turning to border surveillance, we now expect that there will be over 1,000 new border surveillance towers installed, and we ultimately expect to win placement in the majority of those. With prices of $150,000 to $250,000 per camera, one camera goes on each border tower, And like far servicing two of the three border tower vendors, this could be an extremely material business for us in the coming two to three years. The naval domain, the U.S. Navy's SPIR program, for which we supply key infrared cameras to L3 Harris, is advancing towards low-rate initial production, positioning us for long-term revenue streams as the system is installed across surface vessels. Also, our collaboration with Lockheed Martin on the Next Generation Stinger Replacement Initiative also remains an important future opportunity, and I'll talk a bit more about this in a second. That program is currently in testing, and if selected, could represent as much as $50 to $100 million of annual revenue while in full-rate productions. Beyond those specific programs, we have a number of additional programs with potential for over 10 million in annual revenue from each. And we, of course, continue to see growing demand for our engineered lens assemblies designed to replace legacy germanium optics in thermal cameras and drone payloads. While that part of the business cannot point to one specific program like we have with the long-range cameras, There are a multitude of customers and programs that are continuing to drive very strong growth for the assemblies and optics part of the business, also based on our black diamond glass technology. With this rapidly scaling backlog and prospective customer list, scaling production will prove to be paramount. To that end, we're taking several strategic measures to position ourselves better for the robust growth that we believe our future holds. Looking at our Texas facility, just next week, we'll be moving our team into a much larger facility, intended to support the immense production volumes needed for the Lockheed NGSRI program, which we continue to be very bullish about. In parallel, in Orlando, we are adding capacity for additional black diamond glass manufacturing, as well as for the first time, building, integrating, and testing complete G5 cameras in Orlando, supporting the robust demand growth G5 is realizing. To oversee this, we've appointed Israel Pierre Giovano as Vice President of Manufacturing, a former Luminar Manufacturing veteran who will oversee the production scale-up across our global footprint. We also recently strengthened our corporate governance with the appointment of Mark Kahler to the Board of Directors. Mark is a veteran defense industry executive with over 35 years of experience driving profitable growth and leading large organizations. He recently retired as president of Northrop Grumman Mission Systems Sector, a supplier of advanced sensing, processing, and communication technologies for defense and intelligent customers. with operations in US and Europe. His guidance, leveraging an extensive background across government, military, private, and public sectors, and the relationships on the side of the defense primes, will help guide our vision forward. In summary, the transformation of LightWave is now well underway. We are moving from components to systems, and from commoditized supply to strategic technology leadership. We're replacing constraint China-linked materials with domestic, scalable, and proprietary alternatives. And we are converting that differentiation into multi-year contracts, strategic investment, and long-term relationships with some of the most sophisticated defense and industrial customers in the world. With a record backlog, growing portfolio of germanium-free systems, and a recent strategic investment to help scale production, We believe LightBath is positioned to sustain growth and expand profitability. The strategic work of the past several years is now delivering tangible assets, and we're expected to continue momentum through fiscal 2026 and beyond. Now, I'd like to turn the call over to our CFO, Al Miranda, to talk about our first quarter fiscal 2026 financial results. Al, please go ahead.

Thank you, Sam. I'll keep my review to a succinct highlight 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 10Q for the period. I encourage you to visit our investor relations webpage to access these documents. Revenue for the first quarter of fiscal 2026 increased 79% to $15.1 million as compared to $8.4 million in the same year-ago quarter. Sales of infrared components were 4.3 million, or 28% of the company consolidated revenue. Revenue from visible components was 3.8 million, or 25% of consolidated revenue. Revenue from assemblies and modules were 5.9 million, or 39% of consolidated revenue. Revenue from engineering services was 1.1 million, or 7% of consolidated revenue. gross profit increased 58 percent to 4.5 million or 30 percent of total revenues in the first quarter of 2026 as compared to 2.8 million or 34 percent of total revenues in the same year ago quarter. The difference in the gross margin as a percentage of revenue was primarily due to certain non-recurring or end of life orders in the prior year period that had higher margins. Operating expenses increased 66% to $7 million for the first quarter of fiscal 2026 as compared to $4.2 million in the same quarter of the prior fiscal year. The increase was primarily due to the integration of G5 following its acquisition earlier this year, as well as increased sales and marketing spending to promote new products. Net loss in the first quarter of fiscal 2026 totaled $2.9 million or 7 cents per basic and diluted share as compared to 1.6 million or 4 cents per basic and diluted share in the same quarter of the prior fiscal year. Adjusted EBITDA for the first quarter of fiscal 2026 was 0.4 million positive compared to an adjusted EBITDA loss of 0.2 million for the same period of the prior fiscal year. Although not perfect, we believe that adjusted EBITDA is a better indicator of core operating performance by excluding non-core, non-cash items. Cash and cash equivalents as of September 30th, 2025 total 11.5 million as compared to 4.9 million as of June 30th, 2025. As of September 30th, 2025, total debt stood at $5.6 million, and backlog totaled $86 million. Looking forward, our focus for fiscal year 2026 supports the business opportunities that Sam just described. We have a detailed go-to-market strategy that we are funding to target key high-growth areas. Our prior year investments in manufacturing are bearing fruit in terms of quality and on-time delivery, And in the coming quarters, I expect we'll see margin expansion as a result. But with all of the interesting accounting around acquisitions, we will continue to report adjusted EBITDA in fiscal year 2026 as a helpful measure of financial success. Also, as Sam noted, we recently secured an $8 million strategic investment from Hondas Holdings and Unusual Machines at $5 per share. We are truly fortunate the quality of investors in the company and on dust and unusual machines are not only a continuation of quality investors, but in addition, they're a great strategic hit. With that, I will turn the call back to Sam.