Let's start with this plan to increase defense spending. We know that NATO countries have committed to that 5% defense spending target. How is this likely to play out in Europe in the coming months.Yes. This announcement was made by Ursula von der Leyen, the head of the European Commission, as part of a tour of seven European states that are closest to the frontline where that war is continuing in Ukraine. And so it was very much a show of solidarity by the EU to show these frontline countries that they're ...

Norway has picked the UK as the supplier of frigates for its navy, in what would be the biggest ever investment in the Nordic country’s defense https://t.co/Vn2hjfoZwY ...

Taiwan has proposed stepping up defense spending next year, a move intended to mollify President Donald Trump https://t.co/JUgbj3zRnF ...

Europeans live in a world where others increasingly call the shots. But shaping one’s own future—spending more on defence, producing more stuff, and so on—looks a lot like hard work https://t.co/WdyCsdArXOIllustration: Peter Schrank https://t.co/n9ARzY4GMC ...

Geopolitical Implications - America is requesting an increase in defence spending in the region [1]

Geopolitical Landscape - Europe faces increasing external influence on its decisions [1] - Shaping its own future requires significant effort, including increased defense spending and production [1]

Geopolitical Strategy - The report suggests Donald Trump is correct in urging Asian partners to increase defense spending [1] - The Pentagon should exercise caution in aggressively promoting this message throughout the region [1]

Financial Data and Key Metrics Changes - Total revenues for Q2 2025 were $8.5 million, down from $12.3 million in the prior year, primarily due to government budgeting processes impacting orders [18] - Product revenues decreased to $7.5 million from $11.1 million in Q2 2024 [18] - Funded research and development revenues fell by $900,000 to $300,000, attributed to the completion of the CR3 medical headset development [19] - The net loss for Q2 2025 was $5.2 million or $0.03 per share, compared to a net loss of $5.9 million or $0.05 per share in Q2 2024 [21][22] Business Line Data and Key Metrics Changes - R&D expenses increased to $1.9 million, up approximately $100,000 from the previous year, with internal R&D expenses rising by $300,000 [20] - SG&A expenses were $7.9 million in Q2 2025, compared to $7.3 million in Q2 2024, primarily due to a decrease in legal fees [20] Market Data and Key Metrics Changes - The European nations and NATO allies are projected to spend over $1 trillion in defense spending, making this region critical for growth [6] - The partnership with Theon is expected to drive increased revenue and market share in Europe, Southeast Asia, and with NATO allies [5][6] Company Strategy and Development Direction - The company is focusing on application-specific solutions and has a strategic partnership with Theon International to enhance its market position [5][9] - A three-year strategic plan has been developed with Theon for revenue growth and technology sharing [9] - The company aims to capitalize on macro trends in defense spending and technology advancements [7][10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that Q2 2025 did not meet expectations due to government budget uncertainty but noted that the order book is recovering [10] - The company is optimistic about future revenue recognition from delayed orders and expects significant R&D awards soon [11] - Management emphasized the importance of their technology in enhancing soldier safety and the evolving nature of warfare [16][47] Other Important Information - The company introduced its first phase of optical inspection, which is expected to save significant operating expenses and improve throughput [11] - The new AI-enabled neural display hardware prototype is a significant technological advancement for the company [12] Q&A Session Summary Question: Size of the opportunity with Theon - Management indicated that there are multiple opportunities, including internal spending on microdisplays and application-specific solutions like DayVAS and DarkWave [27][28] Question: Book to bill number for Q2 - Management confirmed a positive book to bill ratio for Q2, although it was lower than expected, with a significant amount of funded R&D orders anticipated [32] Question: Automation and gross margin advantages - Management reported that the introduction of optical inspection solutions is expected to yield operational expense recovery and further automation is planned for Q4 [36][37]

Defense Spending & Military Restructuring - Indonesia has created more than 20 regional commands in its biggest armed forces overhaul in decades [1] - This overhaul coincides with a sharp increase in defense spending under President Prabowo Subianto [1]

Business Strategy - Thyssenkrupp is divesting its warship unit [1] - The move aims to capitalize on increased European defense spending [1] - The warship business has been slow, costly, and difficult to scale [1]