Good morning, everyone, and welcome to the Copen Corporation 4th Quarter 2025 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, Friday, March 27, 2026, and the earnings press release accompanying this conference call was issued earlier this morning. Before we get started, I'd like to remind everyone that during today's call, we will be making forward-looking statements as defined in the Private Security Litigation Reform Act of 1995. These statements are based on the company's current expectations, projections, beliefs, and estimates, and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those forward-looking statements. Potential risks include, but are not limited to, demand for our products, operating results of our subsidiaries, market conditions, and other factors discussed in our most recent annual report on Form 10-K and other documents filed with the Securities and Exchange Commission. Although the company believes that the assumptions underlying these statements are reasonable, any of them can be proven inaccurate, and there can be no assurances that the results will be realized. The company undertakes no obligation to update the forward-looking statements made during today's call. Copen Corporation's Chief Executive Officer, Michael Murray, will begin today's call with an overview of Copen's strategic progress and business developments. following michael copen's cfo eric mans will review the company's fourth quarter 2025 unaudited preliminary financial results i would now like to turn the conference over to michael murray michael the floor is yours thank you operator and good morning to everyone and welcome to our fourth quarter and full year 2025 earnings call i want to start by saying that 2025 was a truly transformational year for coping we made significant progress on our strategic initiatives

strengthened our balance sheet with 56 million in capital from strategic and institutional investors advanced our defense programs and established partnerships that we believe will drive meaningful growth for years to come like many other firms our fourth quarter revenues were impacted by the government shutdown and the associated procurement and milestone recognition delays were deeper than anticipated. However, our underlying business, fundamentals, and long-term growth pipeline remain exceptionally strong. Indeed, due to geopolitical conflicts and tensions, we are already experiencing increased demand and order signals for our products and solutions to feel confident that we can recover quickly from this isolated event, which was outside of our control. Over the past three years, we have fundamentally transformed COPAN from a legacy micro-display company into a strategically positioned, vertically integrated, and advanced technology platform company. The first phase of our transformation plan included an assembled new management team, reconstituting our board of directors, reorganizing our engineering teams, greatly improving our manufacturing facility and processes, resulting in some of the highest and most consistent customer satisfaction, quality control, and employee survey scores ever in our company history. Our capital structure is in a far better place than it was even 12 months ago, and now we have the partnerships, the capital, and the technological capabilities to invest aggressively in the people, technologies, and production capacity needed to significantly accelerate our growth trajectory. Now, let me walk you through each of these areas in more detail. When it pertains to strategic partnerships and global expansion, 2025 was a pivotal year for COPEN, as we executed on several transformational strategic initiatives. First, our One COPEN initiative integrated three separate businesses into one, creating parenting advantages, reduced costs, and focused the company on our collective goals. Our FabLite strategy completed its next phase as we expanded our OLED deposition partnerships to U.S. DOD and European-approved suppliers. This has created a significant surge in OLED demand for the company and we continue to gain share in this market space we're also executed on time and full initiatives exceptionally well and our customer scorecards reflect our excellent performance and in turn we are seeing increased levels of new opportunities to reward our efforts we also executed on our European expansion with our partnership with beyond international which we announced in August this engagement has opened the door to the rapidly expanding and growing european southeast asian and nato defense markets sales with beyond have commenced and we are executing on our aggressive three-year strategic plan for revenue and technology sharing beyond reached across europe southeast asia and nato markets gives us immediate access to the defense budgets that are expanding significantly in response to evolving global security threats we are making good progress on joint development initiatives and expect this partnership to become an increasingly meaningful contributor to our revenue base this year and more significantly next year. Zeon International is a critical relationship for COVID. They develop and manufacture cutting-edge night vision and thermal imaging systems for defense and security applications with a truly global footprint spanning more than 50 countries. Zeon started its operations in 1997 and today occupies a leading role in the sector thanks to its international presence and is one of the fastest growing companies in Europe. Their production of night vision and thermal imaging systems aligns perfectly with our micro display technologies and capabilities. Increased defense budgets across NATO member states and the need for enhanced situational awareness and nighttime operations, border security, and counterterrorism missions are primary drivers of significant growth expectations, especially across Europe. Our increased focus in Europe has already started to pay off as we've announced three new contracts with three new European customers in just the first quarter of 2026 alone, which will grow our European business significantly this year and potentially double next year. As governments worldwide are investing in modernization efforts and advanced night vision technologies, innovations such as thermal imaging, augmented reality data overlays, digital night vision, and the use of high-resolution sensors are improving performance, durability, and cost effectiveness, thus expanding the range of applications where our joint solutions can compete effectively. Copen and Theon together are uniquely positioned to capture those opportunities. In addition, our partnerships with OnDOS Holdings and Unusual Machines have positioned us to capitalize on the explosive growth in the U.S. drone market. The U.S. Army has signaled its intent to procure over 1 million drones in the coming years, which is only further accelerated due to the recent geopolitical developments such as the ongoing conflict in Iran. And the first-person drone market is projected to grow from under 300 million to 1.2 billion by 2030, a 31% compound annual growth rate. We continue to advance these partnerships and are encouraged by the pace of the development activity, and we have partnered with several of the top drone dominance companies in the industry today. The defense drone market represents a significant opportunity for our display and optical technologies, and we expect to announce several new customer orders this year. I'm going to touch on the defense programs and give you an update there. our defense programs continue to represent the core of our business and our strength and strongest growth driver we continue to supply thermal weapon site programs which remain core to our revenue and on sbmc formerly known as ivass the 22 billion dollar army program now under andrel continues to progress prime contractor selections and critical technology acquisition areas and wins are expected our ivass funded color micro led program is positioned and progressing well and we've continued to support multiple armored vehicles aircraft huds and helmet systems and next generation weapon site systems and programs across the department of war again our for our first color micro led is being designed with the army for the army for this end application in mind soldier born mission command is also an all-encompassing program that includes software hardware and networking elements designed to give soldiers the tools that deliver the right information quickly and intuitively as warfare evolves and increases in complexity. The U.S. Army has selected a third prime contractor to provide early demonstrable hardware in 2026 and 2027, followed by a second phase of demonstrations and production selection awards in 2027. Along with prime contractor selections, we expect wins for critical technology acquisition areas where Copen fits in to follow a similar path. This represents a generational opportunity for Copen, and we're actively engaged with the relevant stakeholders to ensure our technology is well-positioned for selection. Furthermore, we have negotiated a similar micro-LED product for Theon and the European market as part of our strategic investment, which opens an additional addressable market outside of the United States. The $3.4 million color micro-LED award through the IBAS program remains a landmark win representing a $1 billion serviceable available market in the United States alone for Copen. With similar products negotiated for Theon in the European market, this is an exceptional opportunity for growth. Development is progressing on schedule, and our customer engagement remains strong. we believe our color micro led technology and growing portfolio devices will be a significant growth growth driver as we move towards production in the coming years in the long-term nature of many of our existing programs and the contract wins throughout 2025 our current pipeline remains exceptionally strong as a reminder several of our programs have con congressional budget demands through 2030, and several of our contracts are in definite demand, indefinite quantity, or IDIQ, which allows for even greater revenue than we currently have on order or are forecasting. Increasing geopolitical tensions mean defense spending is unlikely to decrease, and the way wars are fought is evolving rapidly. Soldiers in the field are tasked with needing more information sooner to assess threat levels and make the best decisions for themselves and their teams. Our products and technologies can help to make our soldiers and the soldiers of our allies safer, meaning more men and women in uniform make it home. We believe we can begin meaningful, accelerated growth over the next several years as the only manufacturer in the world of four different types of micro displays. Our technologies and desire to provide application-specific optical solutions means we can meaningfully capture more orders and demand across some of the fastest-growing segments in defense and other applications, and we are partnered with global players in the fields to do so. Now, to touch on our technology and operational progress, on the operational front, our investment into automation is delivering meaningful results. Both phases of our optical automation program are now operational, and we're seeing meaningful improvements in the throughput, quality consistency, and cost efficiency from that investment. We expect these automation investments to deliver over $1 million in annual operating expense savings as they reach full utilization. Turning to some advanced technology, our neural display technology continues to advance and has proven that a micro display is not just a display, but a bi-directional sensing system providing and consuming images and data at the same time. Neural display technology represents a meaningful leap forward in how information is presented to the end user. By leveraging advanced processing and display optimization, neural display has the potential to significantly enhance image quality, reduce power consumption, and improve the overall user experience for both defense and commercial applications. We are encouraged by the interest we see from customers and expect to provide more substantial updates as we progress through the development milestones for this year. As the only manufacturer in the world producing four types of micro displays, being micro LED, AMLCD, LCOS, and OLED, and the inventor of a fifth type, which is neural display, we maintain a unique competitive advantage that positions us well across multiple defense and industrial applications. And we continue to see exciting new applications for our micro displays and sensing technologies, which I look forward to providing updates on very, very soon. Now, let's look at 2025 year in review and talk a little bit about 2026 outlook. To summarize, 2025 was a year of significant transformation for the company. We brought in new leadership with our CFO, Eric Manns, added experienced board members, established the transformative Theon partnership, won the landmark IBAS color micro-LED program, raised $56 million in capital to remove going concern doubt, funded our growth, and invested in automation to improve quality and efficiency. I am more excited and encouraged about our outlook today than I ever have been before or since I joined the company. We are in a completely different company and space today, and I would argue we are far better and more sustainable than we ever have been before. This offers tremendous and significant growth potential for Copen. I believe we are on the cusp of meaningful changes at Copen. I'm incredibly proud of the team for navigating an environment which has so much change over a short period of time. There have been a lot of distractions, but our team has kept their heads down and focused on the company's mission, direction, and potential. Now looking ahead to 2026, we now enter the second phase of our transformation plan. The first phase was fix, focus, and grow. Our second phase is accelerate, expand, and innovate. Acceleration of our revenue growth within our current customer base and markets and new ones to support long-term sustainable growth and profitability. Acceleration of time to market with new technologies, proof of concepts, and production. Expand our customer reach, solution depth, and concentration. Expand our geographic reach and partnerships to help us grow and, importantly, expand our product portfolios. Innovation is core to our capability at Copen, and this year the market will see several new technologies and announcements in new and exciting markets that will accelerate our revenue, expand our customer base, and balance our business dependencies. Our priorities are clear, execute on defense programs, grow our Theon partnership revenues, and advance our micro-LED technology towards production and deliver profitable growth. While the government shutdown created an unexpected and longer headwind than expected in Q4, and we expect some degree of continued impact in Q1, 2026, we are confident that our strategic positioning and strong pipeline will drive meaningful revenue recovery as government operations normalize. To this end, we are providing a conservative guidance for 2026 of between $52 million to $60 million in revenue for 2026. I will now turn the call over to our CFO, Eric Manz, to review our fourth quarter 2025 financial results in further detail.

Thank you, Michael. Before I begin, I'd like to note that the financial results we are discussing today are unaudited, and while subject to finalization, we do not expect any material changes. We'll be filing our 10K for the 2025 fiscal year in the coming days, which will supplement the unaudited financial results outlined below. as michael mentioned our fourth quarter results came in softer than expected driven by the factors he outlined i would also note that our reported results reflect the deconsolidation of our uk entity in the fourth quarter due to technical accounting considerations that were the result of a fourth quarter investment in that entity the deconsolidation when there's not a significant factor in the quarter's operating results and while it does impact comparability we expect this to be temporary in nature and anticipate reconciling the ante in the near term importantly the softness of the quarter does not reflect the change in the underlying direction of the business or in our level of conviction from my perspective and based on what i've seen since joining the company is making meaningful progress in positioning itself for the next phase of growth we are continuing to build momentum in transitioning the business with a clear focus on strengthening strengthening our financial foundation, improving operational execution, and aligning our resources around the opportunities we believe will derive sustainable long-term growth. This is my first full quarter as CFO. I've been focused on gaining an understanding of the business, our opportunities, and our internal structure to support growth. As we progress into the new year, the focus of my team is strengthening our financial reporting, improving operational visibility, and supporting COPAN strategic growth initiatives. With that context, let me walk through the financial results for the quarter. Total revenues for the fourth quarter ended December 27, 2025, were $8.4 million, as compared to $14.6 million for the fourth quarter ended December 28, 2024. The year-over-year decrease in revenues was primarily attributed to the government shutdown and associated procurement delays, which impacted timing of expected program orders, product shipments, and contract activity during the quarter. Product revenues for the fourth quarter were $5.6 million as compared to $12.6 million in the year-ago period. The decrease was prior due to government shutdown-related delays in product orders and several of our end customers experienced, resulting in lower orders in shipments of products for U.S. defense applications. Standard training and simulation order flow, which can ship within the same quarter, was seasonally lower than expected as well. Product order flow has since returned to anticipated levels, while new European product orders have exceeded forecasts. Non-product revenues, which I defined as funded R&D, collaborative agreement, and grant revenues, were $2.5 million in the fourth quarter of 2025, as compared to $1.7 million in the fourth quarter of 2024. The increase was primarily driven by the IBAS Color Micro-LED Development Program. However, revenue and research awards will lower due to delays. Several of these contracts have been awarded, with several others still expected. Cost of product revenue for the fourth quarter of 2025 was $4.7 million, or 83% of net product revenues, as compared to $10.7 million, or 84% of net product revenues, for the fourth quarter of 2024. The decreasing cost of product revenue as a percentage of net product revenues was primarily attributable to changes in product mix. Actions taken throughout the year with regards to quality, cost containment, and automation allowed for similar results to the comparative period, even with the reduced volume. Research and development expenses for the fourth quarter of 2025 were $3.5 million as compared to $3.2 million for the fourth quarter of 2024. The increase is not material, and the company considers it to be within the range of normal quarterly fluctuations. This spending level ensures continued investments in internally-funded technology development, including new technology, process improvements, and micro-LED advancements. Selling, general, and administrative expenses were $4.5 million in the fourth quarter of 2045, as compared to $3.1 million in the fourth quarter of 2024. The increase was primarily due to higher professional fees and outside services associated with the capital raise and strategic partnership transactions completed during the quarter, partially offset by lower incentive compensation costs. As of December 27, 2025, the company had cash and cash equivalents of $37.8 million. The bonded cash of $23 million is presented as a long-term asset, and as a result of the deconsolidation of COP in Europe, previously mentioned, there was approximately $8 million of cash that will not be shown within the consolidated results. A cash position has improved primarily driven by the completion of $56 million in private placements from strategic and institutional investors. With that, I'll turn the call back over to Michael for closing remarks.

Eric, before we open up to questions, I want to leave you with this. The government shutdown was an unforeseen and unexpected speed bump, not a roadblock or a trend. Our balance sheet is the strongest it's ever been. Our partnerships with BEON and the U.S. defense contractors are generating real activity, and our defense pipeline is both deep and durable. What sets COPAN apart is straightforward. We are the only company in the world manufacturing four types of micro-displays, and we embed to the fifth. And we are the sole source provider on several programs of record within the Department of War and now NATO. Every product we build, whether it goes into a weapon site, a helmet-mounted display, or an armored vehicle system, exists to keep soldiers safer and more effective. Our surgical headsets produce better patient outcomes, and our next-generation technology will enable advances in other markets as well. That mission drives every decision we make, and it's why we've aligned ourselves with the government agencies we have, the Pentagon, NATO, and Tier 1 defense primes and partners globally, who share that commitment. And there's more to come, and soon. We believe 2026 will be the year this company begins to demonstrate our full potential of everything we built thus far. And I'm encouraged to say that I'm looking forward to 2026 and 2027 as we pivot this company towards our second phase of our transformation plan. And with that, operator, we'll open the call to questions.

Thank you. If you'd like to ask a question, press star 1 on your keypad. To leave the queue at any time, press star 2. Once again, that is star 1 to ask a question. And we'll pause for just a moment to allow everyone a chance to join the queue. And we'll take our first question today from Jonathan Siegman with Stiefel. Your line is now open.

Thanks for taking my question.

Jonathan?

Can you maybe highlight what your backlog is as of December 31st first in the remaining performance obligations. You ended the third quarter with that pretty high. I just wanted to see how that trended, given revenues were lower. Thank you.

Yep. So, at the end of the year, backlogs were in the range of I believe $37 million. And we're expecting to book very soon several larger orders. We're talking tens of millions of dollars in the next, I'd say, eight weeks. that are deliverable for this year. So we walked into 2026 with a very decent backlog cover and order cover to hit our revenue growth.

Great. Yeah, much improved relative to 12 months ago. And then in September, you had previously expected the micro LED program to be – the development program to be finished this year.

Did the delays from Q4 extend that into 27, or can we still expect that to be actually completed? this year uh so we are working towards completion for this year uh with the milestones that we originally had not sure at this point if that will drip into 2027 but from a technical point of view the milestones that we've achieved and the technical program is well on track however However, we're unsure how the Army will respond to their testing. But from what we can control, our technical milestones are on track and actually a little bit ahead of schedule.

Thank you. Good luck with the year. Thanks, Jonathan.

Thank you. Our next question comes from Jason Schmidt with Lake Street. Your line is now open.

Hey, guys. Thanks for taking my questions. Just following up on the SBMC program, good to see that the milestones are on track. I'm curious how we should be thinking about potential capacity needs as you get better line of sight to that program ramping.

Fantastic question. Thanks, Jason. So part of this program under the Industrial Base Analysis and Sustainment Act, Jason, is to build the capacity here in the United States. And one of the milestones that we've reached within this quarter is we have selected certain tooling equipment, and we have purchased that equipment for our production line, we believe that we can service the requirements for SBMC as well as other programs with this production line that we're implementing right now within COPEN. And we have some exciting news coming around how we are going to optimize our throughput of that production line and some other interesting things that we're going to be doing with the facilities here in the united states uh for that volume specifically currently we do not need any further capex to invest to hit the volumes for sbmc and our new pilot heads up displays as well as some of the thermal weapon site displays that we're also targeting as being like our LEDs. So there is further IBAS award money that we are expecting to grow our backlog or probably our capacity, but we are not clear on when that money may or may not come at this point.

Yeah, so that's helpful. And then just as a follow-up regarding the automation initiatives, I know you mentioned $1 million in annualized savings at full utilization. When do you expect that to be achieved?

We're actually starting to see it now. It's starting to wash through our OPEX, Jason, as we speak, and we have some good data that we can share offline to show the cost savings, the scrap savings, and the throughput increases that our automation has provided us. Much of this automation is in camera systems for testing devices, whether it be a thermal a weapons site or a display. So we're seeing that OPEC savings right now as we speak, and this will be the first year that we can actually show quarter-over-quarter results on the automation side of things.

Okay, really helpful. Thanks a lot, guys. Thanks, Jason.

Our next question comes from Austin Muller with Canaccord. Your line is now open.

Hi, good morning. So I was just going to ask about how you view the commercial market opportunity in the United States for drones now that the FCC has put the DJI ban in place?

Virgining would be the word. Where we fit in, Austin, and thanks for the question, is in the first-person viewers. So we've already been demonstrating our DAVAS technology, which is a monocle that swings off of a helmet that you can actually view. drone information as well as our dark wave capability, which also allows you to view drone information. So those two technologies we're seeing increased demand for because of the drone market. But in the first-person viewer controller market, because of the FTC, we're seeing companies that normally would buy their devices out of China come to COPAN and ask us, please just redesign this with your displays and optics, period, full stop. So we have a number of those activities going on right now. We expect to have some meaningful results to share by Q3. And we have several massive drone companies that are working with us right now. And some of the volumes that they're talking about Austin are anywhere between 60 to 100,000 first-person viewers, which is 120,000 to 240,000 micro displays and optics for COPAN that we would put through the facility, you know, starting Q3, Q4 this year. So we're absolutely seeing an increased demand in that area for sure.

Okay. And how do you think about the $450 billion reconciliation bill that's being talked about for this year to be passed before the midterms. How much do you think might be allocated specifically for micro displays and optics? I guess, how do you think about the timing and cadence of contract award opportunities out of that? Should it be passed?

We've been very active on Capitol Hill, specifically with our local congressmen and senators. Firstly, for additional monies through the IBAS Award Office. I've been very vocal that we've requested at between 10 to 50 million dollars of additional IBAS funding for our expansion and we've been i think successful we have not seen what will come out of the budget obviously but we expect to see that around september austin furthermore we are seeing much more demand for defense systems in soldier born systems meaning thermal weapons sight, night vision goggles, certainly the next generation of capabilities in that area. And we are squarely focused in that. And the Department of War has clearly stated that Copen is the partner of choice for that technology. So we're absolutely enthused with what the budget is looking like right now for us. We are very active on Capitol Hill to make sure that that industrial-based money comes to COPEN, and we can grow that production line that we spoke about earlier to the highest performance as well as throughput. So we're also seeing increased demands and budgeting in Europe as well, which is now we're active in discussions directly with NATO. So we think that's going to prove positive for the company.

Fantastic. I'll pass it back there. Thank you.

Thank you. Our next question comes from Christian Schwab with Craig Hallam. Your line is now open.

Great, thanks. I'm wondering if you could elaborate a little bit more regarding a few mentions regarding new markets and new technologies and are these opportunities outside the defense industry I'm just kind of wondering if you give any the further clarity of what you're hinting at or am I reading that wrong trying not to I'm very excited about the new technology that we've been developing we've been very quiet about how we spend our internal research and development Christian for a reason I think the two programs that we're going to announce

this year will be very shocking to the market they are new markets they are new devices in new technology areas for the company and I was hoping that we would be able to speak about them today and during our demo days in New York City which is next week unfortunately they're not ready yet to talk about but we will be announcing two new products and product lines in two new markets this year.

No other questions. Thank you.

I wish I could talk about it more, but we'll have to wait.

Thank you. At this time, there are no further questions in queue. I will now turn the meeting back to Michael Murray.

Thank you, Operator, and thank you to everyone for joining us today. We appreciate your continued support and look forward to updating you on our progress in the months to come. If you have any further questions, please feel free to reach out to our IR firm, MZ Group. We would be happy to answer them and schedule calls if need be. Thank you very much for joining and we appreciate your support. Thank you.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may now disconnect your line at this time and have a wonderful day.