Financial Data and Key Metrics Changes - Revenue for Q1 fiscal 2026 increased by 79% to $15.1 million compared to $8.4 million in the same quarter of the previous year [19] - Gross profit rose by 58% to $4.5 million, representing 30% of total revenues, down from 34% in the prior year due to non-recurring orders with higher margins [20] - Operating expenses increased by 66% to $7 million, primarily due to the integration of G5 Infrared and increased sales and marketing spending [20] - Net loss for Q1 fiscal 2026 totaled $2.9 million, or $0.07 per share, compared to a loss of $1.6 million, or $0.04 per share, in the same quarter last year [21] - Adjusted EBITDA was positive at $0.4 million, compared to a loss of $0.2 million in the prior year [21] - Cash and cash equivalents as of September 30, 2025, totaled $11.5 million, up from $4.9 million as of June 30, 2025 [21] Business Line Data and Key Metrics Changes - Revenue from infrared components was $4.3 million (28% of total revenue), visible components generated $3.8 million (25%), assemblies/modules accounted for $5.9 million (39%), and engineering services brought in $1.1 million (7%) [19] - The backlog reached approximately $90 million, with over two-thirds in systems and subsystems, indicating a successful shift up the value chain [11] Market Data and Key Metrics Changes - The company is experiencing strong demand in border surveillance and Counter-UAS applications, with over $15 million of the backlog dedicated to Counter-UAS [12] - Anticipation of over 1,000 new border surveillance towers, with expected placements priced between $150,000 and $250,000 per camera [12] Company Strategy and Development Direction - The company is transitioning from a component supplier to a vertically integrated provider of high-value infrared optics and camera systems, focusing on engineered solutions [3][4] - Strategic investments from Ondas Holdings and Unusual Machines aim to accelerate commercialization, particularly in uncooled infrared solutions for drone applications [11] - The proprietary Black Diamond Chalcogenite glass is central to the strategy, providing a domestic alternative to germanium and enhancing supply chain resilience [5][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing a record backlog and the successful integration of G5 Infrared [18] - The focus for fiscal year 2026 includes expanding Germanium-free product variants, hardening the supply chain, and converting backlog into revenue at healthy margins [25] - The company is optimistic about sustaining growth and expanding profitability through strategic investments and operational scaling [18][25] Other Important Information - The company is moving its Texas team to a larger facility to support production needs for the Lockheed NG SRI program [16] - Mark Kahlo has been appointed to the Board of Directors, bringing extensive experience in the defense industry [17] Q&A Session Summary Question: About the availability of germanium and the transition to Black Diamond glass - Management noted that while China may open up germanium availability, customers are cautious due to past supply chain disruptions and are transitioning to Black Diamond glass for better performance [28][29] Question: Supply chain resiliency and capacity improvements - Management indicated that capacity needs to be added across various operations, particularly in glass manufacturing and camera systems, with ongoing investments to meet demand [33][35] Question: Sales progression and EBITDA expectations for the December quarter - Management refrained from providing specific guidance but expressed a desire to maintain the positive sales momentum seen in Q1 [39] Question: Status of the NGSRI program and facility upgrades - Management confirmed that the timeline for the NGSRI program remains uncertain due to government delays, but investments are being made to prepare for potential scaling [44] Question: Gross margin expectations and capacity expansion impact - Management expects gross margins to improve despite fluctuations in sales mix, with a goal of reaching 35% by the end of the fiscal year [46] Question: Pipeline of $10 million plus annual revenue opportunities - Management indicated there are approximately seven to eight programs in the pipeline that could generate significant revenue [62] Question: Integration of systems and technology for counter-UAS applications - Management confirmed that systems are integrated for tracking and validation, emphasizing the importance of visual confirmation in defense applications [84]

Financial Data and Key Metrics Changes - Revenue for Q4 fiscal 2025 increased by 41.4% to $12.2 million compared to $8.6 million in the same quarter of the previous year [28] - Gross profit increased by 6.6% to $2.7 million, representing 22% of total revenues, down from 29.2% in the same quarter of the prior fiscal year [30] - Net loss for Q4 fiscal 2025 totaled $7.1 million, or $0.16 per share, compared to a loss of $2.4 million, or $0.06 per share in the same quarter of the previous year [31] - Adjusted EBITDA loss for Q4 fiscal 2025 was $1.9 million, compared to a loss of $1.1 million for the same period of the prior fiscal year [32] Business Line Data and Key Metrics Changes - Revenue from infrared components was $4.9 million, accounting for 40% of consolidated revenue [29] - Revenue from visible components was $2.8 million, or 23.2% of consolidated revenue [29] - Revenue from assemblies and modules was $4.2 million, or 34.1% of consolidated revenue [29] - Revenue from engineering services was $0.3 million, or 2.1% of consolidated revenue [29] Market Data and Key Metrics Changes - The company reported a record backlog of $90 million, with more than two-thirds attributed to systems and subsystems [10] - Significant orders totaling over $40 million for infrared cameras were announced for delivery in 2026 and 2027, primarily for border surveillance and counter-UAS applications [11][14] - More than $10 million of the backlog is specifically for cameras designed for counter-UAS systems [15] Company Strategy and Development Direction - The company is transitioning from a component manufacturer to focusing on subsystems and systems enabled by its technologies, particularly in infrared imaging [7] - The acquisition of G5 Infrared is a strategic move to enhance capabilities in thermal imaging cameras and address supply chain challenges [9] - The company aims to leverage its proprietary BlackDiamond glass to create value and capture more of the market [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing a 41% quarter-over-quarter growth and a substantial backlog as indicators of success [26] - The ongoing geopolitical tensions and supply chain disruptions have increased demand for alternatives to germanium, positioning the company favorably [18] - Management anticipates significant growth in the coming years, driven by investments in unique materials and technologies [26] Other Important Information - The company received an $8 million strategic investment from Ondas Holdings and Unusual Machines to support manufacturing efforts [25] - The integration of G5 Infrared was completed ahead of schedule and below budget, enhancing operational capabilities [32] Q&A Session Summary Question: How much did G5 contribute to revenue in the June quarter? - G5 contributed $4.2 million to revenue [39] Question: How much does G5 comprise of the $90 million backlog? - Approximately two-thirds of the backlog consists of cameras and assemblies [40] Question: Are you expecting to be sole sourced for the border security opportunity? - The company is in a unique position and may end up providing all the towers along the border [41] Question: Can you elaborate on the expansion of capacity in Visimid? - The facility will support multiple projects beyond the Lockheed contract, including uncooled cameras and other developments [48] Question: What is the expected gross margin improvement timeline? - The company expects to reach close to 30% gross margin soon, with a longer-term goal of 40% as the product mix shifts [64] Question: What is the status of the Lockheed contract decision timeframe? - The formal decision is expected by next fall, but indications may come sooner [67]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 increased by 41.4% to $12.2 million compared to $8.6 million in the same quarter of the previous year [28] - Gross profit increased by 6.6% to $2.7 million, representing 22% of total revenues, down from 29.2% in the prior year due to increased inventory reserve charges [30] - Operating expenses rose by 52% to $7.2 million, attributed to the integration of G5 Infrared and increased sales and marketing expenses [31] - Net loss for Q4 2025 totaled $7.1 million, or $0.16 per share, compared to a loss of $2.4 million, or $0.06 per share, in the same quarter last year [31] - Adjusted EBITDA loss for Q4 2025 was $1.9 million, compared to a loss of $1.1 million in the prior year [32] Business Line Data and Key Metrics Changes - Sales of infrared components were $4.9 million, accounting for 40% of consolidated revenue [29] - Revenue from visible components was $2.8 million, or 23.2% of consolidated revenue [29] - Revenue from assemblies and modules was $4.2 million, or 34.1% of consolidated revenue [29] - Revenue from engineering services was $0.3 million, or 2.1% of consolidated revenue [29] Market Data and Key Metrics Changes - The company reported a backlog of $90 million, with over two-thirds in systems and subsystems, indicating a successful strategic shift [10] - Recent large orders totaling over $40 million for infrared cameras are expected to be delivered in 2026 and 2027, primarily for border surveillance and counter-UAS applications [11][14] - More than $10 million of the backlog is specifically for cameras for counter-UAS systems, reflecting growth in this rapidly expanding market [15] Company Strategy and Development Direction - The company is transitioning from a component manufacturer to focusing on subsystems and systems, particularly in the infrared imaging market [7] - The acquisition of G5 Infrared is a strategic move to enhance capabilities in thermal imaging cameras and leverage proprietary materials [9] - The company aims to capture more value by moving up the supply chain and focusing on engineered solutions rather than just components [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's transformation and the potential for significant growth, supported by a strong backlog and strategic investments [26] - The ongoing geopolitical issues and supply chain constraints are driving demand for the company's proprietary BlackDiamond glass, which serves as an alternative to germanium [18] - Management anticipates margin expansion and improved profitability as the company continues to execute its growth strategy [34] Other Important Information - The company received an $8 million strategic investment from Ondas Holdings and Unusual Machines to support manufacturing efforts [25] - The integration of G5 Infrared was completed ahead of schedule and below budget, enhancing operational capabilities [32] Q&A Session Summary Question: How much did G5 contribute to revenue in the June quarter? - G5 contributed $4.2 million to revenue [39] Question: How much does G5 comprise of the $90 million backlog? - Approximately two-thirds of the backlog consists of cameras and assemblies [40] Question: Are you expecting to be sole sourced for the border security opportunity? - The company is in a unique position and may end up providing all the towers along the border [41] Question: Can you elaborate on the expansion of capacity in Visimid? - The new facility will support various projects beyond just the NGSRI, including uncooled cameras and drone cameras [48] Question: What is the expected gross margin improvement? - Adjusted gross margins could reach 35% quickly, with a long-term target of around 40% [62] Question: What is the timeline for the Lockheed contract decision? - The formal decision is expected by next fall, but indications may come sooner [64]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 increased by 41.4% to $12.2 million compared to $8.6 million in the same quarter of the previous year [28] - Gross profit increased by 6.6% to $2.7 million, representing 22% of total revenues in Q4 2025, down from 29.2% in the same quarter of the prior fiscal year [30] - Net loss for Q4 2025 totaled $7.1 million, or $0.16 per share, compared to a loss of $2.4 million, or $0.06 per share in the same quarter of the previous year [31] - Adjusted EBITDA loss for Q4 2025 was $1.9 million compared to a loss of $1.1 million for the same period of the prior fiscal year [32] Business Line Data and Key Metrics Changes - Sales of infrared components were $4.9 million, accounting for 40% of consolidated revenue [28] - Revenue from visible components was $2.8 million, or 23.2% of consolidated revenue [29] - Revenue from assemblies and modules was $4.2 million, or 34.1% of consolidated revenue [29] - Revenue from engineering services was $0.3 million, or 2.1% of consolidated revenue [29] Market Data and Key Metrics Changes - The company reported a record backlog of $90 million, with more than two-thirds attributed to systems and subsystems [10] - The backlog includes significant orders for infrared cameras, particularly for border surveillance and counter-UAS applications [11][14] Company Strategy and Development Direction - The company is transitioning from a component manufacturer to focusing on subsystems and systems enabled by its technologies, particularly in infrared imaging [7][10] - The acquisition of G5 Infrared is a strategic move to enhance capabilities in thermal imaging cameras and address supply chain challenges [9][10] - The company aims to capture more value by moving up the supply chain and focusing on engineered solutions [8][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing a 41% quarter-over-quarter growth and a substantial backlog as indicators of success [26] - The ongoing geopolitical issues and supply chain constraints are driving interest in the company's proprietary BlackDiamond glass as a substitute for germanium [18] - Management anticipates significant growth opportunities in defense contracts and other markets, with expectations for margin expansion in the coming quarters [33][34] Other Important Information - The company received an $8 million strategic investment from Ondas Holdings and Unusual Machines to support manufacturing efforts [25][34] - The integration of G5 Infrared was completed ahead of schedule and below budget, enhancing operational capabilities [32] Q&A Session Summary Question: Contribution of G5 to revenue in the June quarter - G5 contributed $4.2 million to revenue in the quarter [39] Question: Breakdown of the $90 million backlog - Approximately two-thirds of the backlog consists of cameras and assemblies [40] Question: Expectations for sole sourcing in border security contracts - The company is in a unique position and may end up providing all the towers along the border [41] Question: Expansion of capacity in Visimid - The facility will support various projects beyond the NGSRI, including uncooled cameras and drone cameras [48] Question: Gross margin dynamics - Adjusted gross margin is close to 30%, with expectations to reach 35% quickly [64] Question: Timeline for Lockheed contract decision - The formal decision is expected by next fall, but indications may come sooner [67] Question: Revenue expectations from a leading global technology customer - The customer was initially expected to contribute around $9 million annually, but the current run rate is more than double that [75]