Financial Data and Key Metrics Changes - Total revenues for Q1 2025 were $10.5 million, a 5% increase from $10 million in the prior year [20] - Product revenues were $9.2 million, essentially flat compared to $9 million in Q1 2024 [20] - Funded research and development revenues increased by 37% to $1.2 million from $900,000 in Q1 2024 [20] - The net loss for Q1 2025 was $3.1 million or $0.02 per share, compared to a net loss of $32.5 million or $0.27 per share in Q1 2024 [22] Business Line Data and Key Metrics Changes - Cost of product revenues decreased to $7.6 million or 83% of net product revenues, down from $8.5 million or 95% in Q1 2024, attributed to improved manufacturing quality [21] - R&D expenses were $2.1 million, a slight increase from the previous year [21] - SG&A expenses decreased to $4.7 million from $7.2 million in Q1 2024, primarily due to a reduction in legal fees [22] Market Data and Key Metrics Changes - The company is focusing on defense as a primary market, with significant increases in global defense budgets due to rising geopolitical tensions [7][8] - The U.S. administration plans to spend $1 trillion on defense next year, with similar commitments from Europe, Japan, and Korea [8] Company Strategy and Development Direction - The company aims to achieve $75 million in revenue by 2027, with expected revenue for 2025 between $52 million and $55 million [10] - Strategic initiatives include the implementation of AI-assisted factory and process automation to improve manufacturing efficiencies [13] - The company is transitioning from being a microdisplay supplier to a trusted partner for leading defense firms, focusing on application-specific solutions [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing a strong pipeline of opportunities and improvements in operations and manufacturing [16][24] - The company anticipates a stronger second half of 2025 compared to the first half, with expectations for increased orders and revenue [57] Other Important Information - The company announced approximately $28 million in new contract wins in Q1 2025, with a book-to-bill ratio of better than 2.8 to 1 [15] - The CR3 medical headset is entering full production, aimed at improving patient outcomes in surgical practices [17] Q&A Session Summary Question: Can you provide more detail on international opportunities? - Management highlighted Europe as a critical growth area, with significant spending and opportunities in the UK and Europe, followed by Korea and Japan [27][28] Question: What is the timeline for automation activities to impact gross margins? - Management expects new automation systems for quality control to be online by June, which should improve gross margins significantly [30][32] Question: Can you clarify revenue guidance for 2025? - Management indicated a conservative approach to guidance due to geopolitical trade issues but expects double-digit growth [36][38] Question: What progress has been made on Neuralink? - Management is working on a demonstrable neural display and expects to have updates in the near future [41][43] Question: What is the current quoting activity and order patterns? - Management noted improved order flow in Q2 after initial struggles in Q1, with several new orders expected soon [47][49]

Financial Data and Key Metrics Changes - Total revenues for Q1 2025 were $10.5 million, a 5% increase from $10 million in the prior year [19] - Product revenues were essentially flat at $9.2 million compared to $9 million in Q1 2024 [19] - Funded research and development revenues increased by 37% to $1.2 million from $900,000 in Q1 2024 [19] - The net loss for Q1 2025 was $3.1 million or $0.02 per share, compared to a net loss of $32.5 million or $0.27 per share in Q1 2024 [21] Business Line Data and Key Metrics Changes - Cost of product revenues decreased to $7.6 million or 83% of net product revenues, down from $8.5 million or 95% in Q1 2024, attributed to improved manufacturing quality [20] - R&D expenses were $2.1 million, a slight increase from the previous year [20] - SG&A expenses decreased significantly to $4.7 million from $7.2 million, primarily due to reduced legal fees [21] Market Data and Key Metrics Changes - The company is focusing on defense as a primary growth area, with increased global defense budgets, particularly in the U.S., Europe, Japan, and Korea [5][6] - The U.S. administration plans to spend $1 trillion on defense next year, with similar commitments from Europe and other nations [6] Company Strategy and Development Direction - The company aims to achieve $75 million in revenue by 2027, up from $50 million in 2024, with expected revenue for 2025 between $52 million and $55 million [9] - Strategic initiatives include the implementation of AI-assisted factory and process automation to improve manufacturing efficiencies [12] - The company is transitioning from being a supplier of microdisplays to a trusted partner for leading defense firms, focusing on bespoke solutions [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing a strong pipeline of opportunities and improvements in operations and manufacturing [15][23] - The geopolitical environment is seen as a driver for increased demand for the company's products, particularly in defense [16] - The company anticipates a stronger second half of 2025 compared to the first half, both in terms of orders and revenue [54] Other Important Information - The company announced approximately $28 million in new contract wins in Q1 2025, with a book-to-bill ratio of better than 2.8 to 1 [13] - The CR3 medical headset is entering full production, aimed at improving patient outcomes in surgical practices [16] Q&A Session Summary Question: Can you provide more detail on international opportunities? - Management highlighted Europe as a critical growth area, with significant opportunities in the UK and potential partnerships in Korea and Japan [26][27] Question: When can automation activities be expected to impact gross margins? - New automation systems for quality control are expected to be online by June, which should improve gross margins significantly [30][32] Question: Can you clarify revenue guidance for 2025? - Management indicated a conservative approach to guidance due to geopolitical trade issues but expects double-digit growth [36][37] Question: What progress has been made on Neuralink? - The company is working on a demonstrable neural display and expects to showcase it soon [42] Question: What is the current quoting activity and order patterns? - After a slow start in Q1, order flow has improved significantly in Q2, with expectations for continued growth [46][48]