Financial Data and Key Metrics Changes - For Q2 2025, revenue was $4.5 million, down from $4.8 million in Q2 2024, slightly below the expected $5 million [38] - Gross margins decreased to 24% from 30% year-over-year [39] - Net loss for the quarter was $910,000 compared to a net loss of $704,000 in the previous year [42] - Adjusted EBITDA was negative $555,000, worsening from a negative adjusted EBITDA of $269,000 last year [42] Business Line Data and Key Metrics Changes - Manufacturing revenue increased by 42% from Q1 to Q2, marking the largest quarter-over-quarter production increase in many years [11] - The single-use cystoscope program and defense aerospace program are driving production increases, with multimillion-dollar backlogs for both [26][27] - The Ross Optical components business has stabilized at approximately $1 million per quarter due to short-term market forces [32] Market Data and Key Metrics Changes - The single-use endoscope market is projected to grow at annual rates of up to 20% [14] - The company is positioned to benefit from the transition to CMOS-based endoscope systems, which are increasingly favored in the market [8][14] Company Strategy and Development Direction - The launch of the Unity imaging platform is expected to enhance the company's competitive position and accelerate time to market for new products [19][21] - The strategy involves leveraging existing designs to create baseline platforms that can be customized for specific customer needs, reducing development risks [18][19] - The company plans to double production capacity for key programs by expanding clean room space and increasing workforce [85][87] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued growth in Q3 and Q4, driven by strong backlogs and the return of normalized engineering operations [46][49] - The company anticipates achieving record production revenue levels in Q3 and Q4, with forecasts of $5 million in Q3 and $6 million in Q4 [43][49] - Management acknowledged capacity limitations as a challenge but emphasized robust plans to address these requirements [34][81] Other Important Information - The Unity platform was launched at major trade shows, receiving positive feedback and generating new development opportunities [24][25] - The company is finalizing facility plans to support growth and expand manufacturing capabilities [44] Q&A Session Summary Question: Update on defense contracts with specification problems - The company has two significant defense aerospace programs, one running steadily at $2 million to $2.5 million annually, and the other has resumed production after resolving measurement errors [55][56][59] Question: Details on the Unity platform - The Unity platform allows for accelerated development timelines by using baseline designs that can be quickly customized for customer needs, potentially reducing time to market by 6 to 12 months [60][70] Question: Reasons for lower-than-expected revenue in Q2 - The product development group faced delays due to the Unity launch and customer-related events that postponed activities, but these are expected to resolve in Q3 [72][76] Question: Plans to increase capacity - The company is expanding clean room capacity and increasing workforce by approximately 80% to meet the substantial backlog in production [84][87]