Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to LightPath Technologies Second Quarter Fiscal 2025 Earnings Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. This conference is being recorded today, February 13, 2025, and the earnings press release accompanying this conference call was issued before the market opened today. I'd like to remind you that during the course of this conference call, the company will be making a number of forward-looking statements that are based on current expectations involve various risks and uncertainties as discussed in its periodic SEC filings. Although the company believes that the assumptions underlying these statements are reasonable, any of them can be proven to be inaccurate, and there could be no assurance that the projected results would be realized. In addition, references may be made to certain financial measures that are not in accordance with generally accepted accounting principles or GAAP. We refer to these as non-GAAP financial measures. Please refer to our SEC reports in certain of our press releases, which include reconciliations of non-GAAP financial measures and associated disclaimers. CEO, Sam Rubin will begin today's call with an overview of today's acquisition of G5 Infrared, a strategic overview of the business and recent developments for the company, while CFO, Al Miranda will then review financial results for the quarter. Following the prepared remarks, there will be a formal question-and-answer session. I would now like to turn the conference over to CEO, Sam Rubin. Sam, the floor is all yours.

Thank you, operator. Good afternoon to everyone, and welcome to LightPath Technologies second quarter fiscal 2025 financial results conference call. Given the important news we announced this morning regarding the acquisition of G5 Infrared, I will be dedicating most of my remarks today to this topic. The acquisition of G5 Infrared is a key and transformative event for LightPath and is a natural continuum of the strategic transition the company has been undertaking for the last few years. As a reminder, up until about four years ago, LightPath was a pure play optical components manufacturer. The core technology for LightPath up until that point, precision glass molding, was an innovative technology in the early 2000s, which gradually became commercialized and commoditized over the last 20 years. What was a leading differentiator for the company years ago has become, by 2020, a widely deployed technology with aggressive and ample competition, pushing LightPath out of the market. In late 2020, shortly after I joined and consequently built a new leadership team, we outlined a new strategy that leverages our differentiated into a more value-added position with the goal to eventually become a solutions and subsystem provider, all of which is foundational to where we have strong domain expertise with the ultimate goal of becoming a systems supplier. We started the journey by first offering optical assemblies based on our optical components, then began to offer compact thermal cameras, such as our MANTIS multispectral camera. And later on, through the acquisition of Visimid Technologies in the summer of 2023, we added advanced capabilities in video engines and camera cores for uncooled infrared cameras. The acquisition of Visimid also came at a critical pivotal point for the Visimid team, but shortly after the acquisition, Visimid and LightPath were awarded a large development contract with Lockheed Martin for a new missile program—a contract that has the potential to translate to between $50 million to $100 million a year in revenue from that one program alone. Similarly, though not as large, Visimid and LightPath have several other large programs in various stages, many of which have the potential of bringing more than $10 million a year in new revenue from each one of those programs. The addition of G5 Infrared, as you will see, fits in naturally into what we have been building and is a logical next step in our journey. Not only do G5's products complement LightPath's products perfectly, but G5 is also at a pivotal point, about to be awarded some large lucrative defense programs that will be moving into low rate initial production. We'll be moving into low rate initial production very soon and from there, shortly into full-scale production. So with this background now framing where we have come from and where we are, let's dive into the acquisition itself. G5 was established in 2011 by a seasoned team known in the industry. This was the second or even third time around for them. The first time around, they built a household name in our industry, establishing a significant part of what was Axsys back in the mid-2000s and later sold to General Dynamics for $643 million in 2009. This highly accomplished team led by Lou Fantozzi is well-known in the industry as the ones that always deliver the highest quality, effectively the gold standard cameras in long-range imaging. These infrared cooled camera systems are used in places where extreme sensitivity of detection is needed, such as detecting people from miles away or vehicles or drones from tens of miles away. And I will talk more about that later. And as is often the case in optics, just like LightPath leverages its BlackDiamond glass to make best-in-class optical systems and uncooled cameras, G5 also has its own optical coating service group, another element in the secret source of these high-end camera systems. These coatings are part of what makes their cameras perform the way they do, and this coating service offered to external customers also accounts for a highly profitable service revenue that makes up to 20% of G5's revenue. These coating capabilities also fit very well with LightPath's infrared components business and will add critical capacity to that of LightPath's business. So clearly, G5 is a successful and well-aligned business to LightPath in and by itself. This is also evident from their growth rates, winning businesses and solid financial performance, delivering strong margins and EBITDA of around or higher than 20% consistently. And while the financial profile is important, growth is too. So I'd like to dive in a bit into the product and technology and how this translates to revenue. LightPath's transition to move from a pure play component to a subsystem or solution provider and from there to a system can be characterized in many ways. But probably one of the best indicators of where a company fits in the food chain are average sales prices of its products. When I joined LightPath in 2020, the company was, as we mentioned, a component company, and its products, individual lenses, had average sales prices ranging from $1 for the really commoditized telecom lenses to up to $100 for the more complex diamond turned lenses. In 2021 to 2022, we gradually transitioned into offering assemblies, a more complex engineered optical product. That resulted in assemblies in average sales prices going from $100 to $500, which is already a significant increase by itself. But while average sales prices in and by themselves are not the goal per se, they're good leading indicators of the complexity of the product and the offering, and hence, the value created by that product. And as many strategy books will tell you, creating value followed by capturing value is how one creates a strategy that leads to sustainable profits and growth. And so we went from single-digit average sales prices to three-digit average sales prices. Next came our uncooled cameras, such as our MANTIS innovative multispectral uncooled camera, which was our ticket into the world of cameras. Those products had average sales prices of $10,000 to begin with, and through more complex cameras for the oil and gas industries, we are now selling cameras with average sales prices of $30,000, which represents a significant leap into five-digit average sales prices. Again, not the goal by itself, but an indicator. Now comes G5 with cooled mid-infrared cameras. Average sales prices of their products start from $50,000 for their entry-level cameras, short-range detection cameras, up to $500,000 for the high-end long-range detection cameras. And when we say long range, we are talking about cameras that can detect the presence of a vehicle from as far as 68 kilometers away, 42 miles. So very, very impressive products. So in the span of four years, we've gone from selling lenses at single dollar prices and declining, unfortunately to assemblies at hundreds of dollars, to uncooled cameras at thousands of dollars and now adding cooled cameras at tens or hundreds of thousands of dollars per day. G5 is also a fast-growing business with a significant pipeline of new business opportunities with multiple programs of record expected to begin production in the next two years, driving strong growth far beyond their existing revenue base. The long-range cameras are used for detecting objects at long ranges. The two main applications are around detection of drones, also known as counter UAS or CUAS, and detection of people in vehicles. The former, counter UAS, is a fast-growing application in which G5's cameras with their proprietary image stabilization software, ATCOM, are considered the best performers in terms of detection range. One of the programs of record G5 is designed into includes placing those cameras on hundreds of naval vessels for the passive detection of incoming threats such as drones and missiles. The term 'passive' is actually pretty important in this context. As we've all seen in the Ukraine conflict battlefield, if one uses an active system such as radar to detect incoming drones and missiles, the radar's emissions immediately turn you into a target. And so passive detection of incoming threats is one of the fastest growing technologies today, and G5 systems are by far the leader in this area. In this application, G5 sells cameras to integrators who place them into larger systems with pan-tilt and motion control and build a complete system for detection and tracking of such threats. A second leading application is perimeter and border security. Here, the same camera technology is used on towers along the border and for perimeter security in critical infrastructure like stadiums and power plants. G5 has a long history with cameras for border security and has hundreds of cameras installed along the border. With the limited lifecycle cryogenic coolers in such systems, G5 also provides ongoing service for the repair of those hundreds of cameras, which presents a great revenue stream that we expect to grow significantly in the coming years. More specifically, G5 provides metal cameras that are used in the Customs and Border Patrol CTSE towers and just last month received their first award and order for the new surveillance towers of Customs and Border Patrol, which are part of the Homeland Security Department. We expect to be able to announce soon more details about those programs, both the naval and the Border Patrol ones. So a highly accretive acquisition brings over $15 million in preliminary unaudited revenue in 2024 and brings us to a point where we expect our combined revenue in the next 12 months to exceed $55 million, placing us in a completely new place altogether. And while we don't provide guidance for future quarters specifically, I would encourage everyone to study the future earnouts that are part of this acquisition as it gives a very clear picture of what G5 management expects the business to look like in the next 24 months. I will give you a hint that the earnout for the first year includes projections of revenue between $21 million to $27 million from G5 alone compared to $15 million last year. That gives a pretty good taste into the kind of growth rates we are looking at. I'd like to take a moment to discuss the previous quarter. It was significantly affected by a major event on December 5, when China announced additional restrictions on germanium exports, completely banning the sale of any germanium to U.S. companies and for any dual-use applications. Although we had prepared for this situation by substantially reducing our germanium business and developing our BlackDiamond substitute, we were not entirely unharmed. Following the announcement, nearly all shipments from China were impacted in some way. This included materials unrelated to the ban, such as zinc selenide and zinc sulfide, which were also halted for a time. As a result, more than three-quarters of a million dollars in revenue from last quarter could not be shipped in the final weeks and will now move into the current quarter. It’s important to note that we haven't lost any revenue. There weren't any cancellations, and we don't expect to lose any of that. It is simply a matter of timing. When all orders and all shipments out of China came to a halt, that impacted also our non-germanium business for a short period of time. We expect this to be covered very soon, although what we are seeing there is that Chinese companies like Vital are completely stopping shipping any optics altogether, not only germanium. However, we have many other suppliers, and we are building into that and are recovering from that small hiccup. It's unfortunate because we report our numbers, of course, on a quarterly basis. And something that happens in the last two or three weeks in a quarter is really just, for us, a matter of timing of revenue and not a business issue. But when reporting on the quarterly numbers, it appears that way. At the same time, we also stood towards the new restrictions leading our customers to make the move to our alternative materials. We are seeing an influx of interest in those materials and are extremely encouraged by this. As a reminder, systems need to be redesigned to replace germanium with other materials. And so what we are seeing now is a very significant asset to start the redesign process by pretty much all customers related to this. With some systems, such as our customer for SPV drone optics that we announced last quarter, the redesign is fairly straightforward and allows us to get it done within weeks. But in other more complex systems, this takes months, and we are seeing quite a bit of this happening now. We are not only working with customers to help those redesigns, but we are also taking a look at our manufacturing capacity to prepare the needed capacity to make the glass needed for these programs once the redesign and qualification is done. As a reminder, we spent nearly $6 million in our Orlando facility over the last few years preparing the infrastructure needed for growth. We do not expect to need to outlay any significant additional capital for this increase in capacity. Okay. Since we are running out of time and I can't really cover everything that happened last quarter, I will encourage everyone to review some of the recent press releases on new products such as the gas detection camera, on new contracts such as our FPV drone optics and many other things that we reported over the last few months. I will also be available as always to answer questions on those. But now I'd like to turn the call over to our CFO, Al Miranda, to talk about our second quarter fiscal 2025 financial results. Al, please go ahead.

Thank you, Sam. I'll keep my review to a succinct highlight of the financials this quarter. As a reminder, much of the information we are discussing during this call was also included in our press release issued earlier today and will be included in the 10-Q for the period. I encourage you to visit our Investor Relations webpage to access these documents. Revenue for the second quarter of fiscal 2025 increased 1.5% to $7.4 million as compared to $7.3 million in the same year ago quarter. Sales of infrared components were $3.1 million or 42%. Revenue from visible components was $2.8 million or 37%. Revenue from assemblies and modules was $0.9 million or 12%. Revenue from engineering services was $0.7 million or 9%. Gross profit decreased 11% to $1.9 million or 26% of total revenues in the second quarter of 2025 as compared to $2.2 million or 30% of total revenues in the same year ago quarter. The decrease in gross margin as a percentage of revenue was primarily driven by differences in the product mix, coupled with minor and typical manufacturing yield issues, exacerbated by a slowdown in supply chain, which Sam discussed, mostly attributable to China exports impacting visible and infrared components. Operating expenses increased 12% to $4.4 million for the second quarter of fiscal 2025 as compared to $4 million in the same quarter of the prior fiscal year. The increase was primarily due to higher legal and consulting fees related to business development initiatives, including $174,000 in expenses associated with the G5 acquisition announced today, product development costs of about $200,000 higher than the comparative quarter, as well as increased sales and marketing spend to promote new products. Net loss in the second quarter of fiscal 2025 totaled $2.6 million or $0.07 per basic and diluted share as compared to $1.7 million or $0.05 per basic and diluted share in the same quarter of the prior fiscal year. The increase in net loss was primarily attributable to lower gross profit coupled with increased SG&A and new product development costs, as well as higher interest expenses. EBITDA loss for the second quarter of fiscal 2025 was $1.5 million compared to a loss of $0.5 million for the same period of the prior fiscal year. The decrease in EBITDA in the second quarter of fiscal 2025 was primarily attributable to lower gross profit, coupled with increased SG&A, including legal and consulting expenses related to business development initiatives, including acquisition costs and higher new product development costs. Cash and cash equivalents as of December 31, 2024, totaled $3.2 million as compared to $3.5 million as of June 30, 2024. As of December 31, 2024, total debt stood at $3.9 million and backlog totaled $19.8 million. As Sam noted, today we announced the acquisition of G5, which had preliminary unaudited revenue of $15 million in the calendar year 2024. The expectation is for the combined companies to generate $55 million in revenue in the 12 months following today's acquisition. Subsequent to quarter end and to finance the G5 acquisition for $27 million of total consideration, we issued $25.5 million of 6.5% fixed convertible preferred equity as well as private placements totaling $1.5 million and two senior secured promissory notes totaling $5.4 million. Following the close of the transaction, the August 2024 bridge promissory note of $3 million will be fully converted and no longer outstanding. The $25.5 million in preferred is mostly held by a fundamental investor that takes a concentrated position with a long-term perspective in a few investments. Terms and conditions are not toxic and are as clean as possible. The investor will also become a Board member for a 5-year term to assist in our growth plans. We consider this new investor a partner in our business. In closing, I view the acquisition of G5 as a robust tool to supercharge the near-term potential of LightPath, particularly in the defense space with the introduction of high margin, high ASP and incremental products. We see this as providing an expedited path to achieving our long-term goal of 15% EBITDA margins. Defining LightPath as a platform company focused on disciplined strategy and delivering value to our shareholders as we scale and grow. With that, I'll turn the call back to Sam for some closing remarks.

Thank you, everyone, for taking the time today to attend our call. Looking ahead, we will continue to drive the future of imaging as seen through our proprietary BlackDiamond Optics, leveraging our clear advantage in our capabilities and supply chain security compared to legacy germanium-based solutions. We've defined catalysts in the industrial, defense, and camera solution market, taken in tandem with our acquisition of G5, providing an entrance into the cooled infrared camera space. We believe calendar 2025 will build additional momentum towards our LightPath 3.0 vision of becoming a leading next-generation optics and imaging solutions provider. With that, I will now turn the call over to the operator to begin the questions and answer session.

The first question comes from Jaeson Schmidt from Lake Street Capital Markets. Please go ahead.

Hey guys. Thanks for taking my questions. Just want to start on the gross margin in December. You noted some kind of manufacturing yield issues. Just curious if those have been fully resolved?

Sorry, Jaeson. Albert and I are sitting together, so we usually need eye contact. Yes. I would say our yield issues in this quarter were not particularly bad. I would say it was normal. You don't get 100% yield, particularly with coatings. They were minor issues. The problem was exacerbated by the fact that we usually have more materials. We can get extra materials. We plan for it. We have it. So when we have yield issues and not a fast and quick source to some of the materials coming out of China, it sort of delays our ability to deliver. So a normal yield issue becomes not a normal yield issue, if you will.

Okay. That makes sense. And then obviously, it sounds like you guys are pretty familiar with G5. Just curious about the customer overlap between the two companies and relatedly the cross-selling opportunities you guys are envisioning. And if there are cross-selling opportunities, are those sort of baked into the growth expectations reflected in the earn-outs?

Yes. I'll take that one. There's definitely some great opportunities there, and we are seeing a lot of excitement from the customers. So to begin with, on just on the optics part, which is the easiest to answer, since G5 has very good and robust optical coating services, they naturally service many of our customers already in that aspect. So that part is sort of an easy, very natural part. When it comes to the camera part, which is really where a lot of our growth we expect will come from, most times when you see today a system that has those cold infrared cameras, it will very, very often have a uncooled camera that goes with it. If you look at companies like Silent Sentinel, part of Motorola, and you look at their product offering, those same pan-tilt systems will have a short-range uncooled camera like our uncooled cameras and a long-range camera from G5 next to it. So the selling opportunities there are tremendous. The same is also in optical gas imaging. Oftentimes in a gas field, there will be many small uncooled cameras like our gas camera and then one large cold camera, which obviously is much more expensive and over $100,000, but that one is able to actually quantify exactly how much gas is leaking. So it gets pointed at the places where the smaller cameras identify the leak to begin with and so on. So there are some great opportunities there. And as of now, those are not baked into the numbers. The revenue numbers for G5 and their earn-out are based on their projections and their own expectations of revenue without any synergies in that.

Okay. That's helpful. And then just last one for me and I'll jump back in the queue. How should we think about the gross margin profile through the G5 business?

Al, you want to take that?

So the camera business has higher margins than the LightPath visible or infrared component business. So in terms of expectations, the margin will blend upwards with the portfolio being added.

Perfect. Thanks a lot, guys.

Thank you.

Thank you. The next question comes from the line of Glenn Mattson from Ladenburg Thalmann. Please go ahead.

Hi, guys, and congrats on the acquisition. I couldn't help but notice your comment when you were talking about G5. You mentioned something about being about to be awarded several large programs and that you should be moving into low rate initial production. I'm just trying to understand that language because normally, I guess you wouldn't say 'about to be awarded' unless you had the business pretty secure. Can you just give us some color on that?

One of them is a matter of dates, literally. I mean, it's in very final negotiations. And when I say low rate initial production, I mean just to put it into perspective, the naval program, for example, for the prototype that we expect to order any day now, it could be several million, let's say $2 million to $3 million for the prototypes. When it goes into production, so low rate initial production is just the beginning of the scaling, we are expecting this could be $10 million to $20 million a year.

Okay. Can you remind me of the time frame for that? You mentioned it earlier.

So prototypes now in the next 6 to 8 months and then we expect low rate initial production towards the end of this calendar year.

Okay. Thanks. That's helpful. And yes, just on the synergies, I missed part of your answer on the last question, but one thing that struck me was in the press release you talked about multiple programs of record for G5.

Is there an opportunity to use those as a funding vehicle whereby you could cross-sell better your uncooled cameras in those projects? Yes. Exactly that. So when you look at many of those systems that are deployed, they would very often have a mix of both uncooled and cooled cameras together. So the uncooled cameras, of course, cannot detect the range of those cameras, so you use them for short-range detection. But because they're much cheaper than the long-range cold ones, you would sometimes deploy a few of them and have them look in different angles. Then you will use the big cold long-range camera on a pan-tilt where you would point it to where one of the uncooled cameras saw something. So oftentimes a combination of both, you can see there are great selling opportunities, and our sales team is extremely excited and can't wait to start cross-selling on both sides.

Right, right. I guess that really makes it sound like a strategic bid like you mentioned. And just lastly, the exposure to some of the issues with the Chinese, can you remind us how much of your business is still exposed to that as you move toward...?

Yes.

So we have $2 million of sales in germanium in the U.S. that I would say is at risk because of the restrictions to bring germanium in. So we're sourcing that locally, switching to a local sourcing, which is a project that's been going on for several weeks. We have also a couple of million of germanium sales in Europe, but at much less risk because Latvia and the end users for those products are not on the Chinese no-sell list. Yet we would like to move all of that product out of germanium as well in Europe. We have similar plans to migrate, but the urgency isn't there yet like it is now in the United States.

Right.

And just to add on that $2 million in the U.S., Al, so first of all, we're going to supply those by sourcing locally, but the local sources of germanium, as everyone knows, are very, very limited. So it's not really a long-term strategy. So once we supply those $2 million of germanium orders in the U.S., we will no longer be doing any germanium business in the U.S.

Okay, great. That's it for me. Thanks guys and congrats again.

Thank you.

Thanks.

Thank you. The next question comes from the line of Orin Hirschman from AIGH Investment. Please go ahead.

Hi. Congratulations on the acquisition. Just going back to some of the earlier comments. So you mentioned on the acquisition, these are just random questions. You mentioned Motorola is an example. Is that a current customer? Were you using that as an actual customer example?

Yes. Motorola is a very large customer of G5, yes.

Isn't the…

And Motorola— to those who don’t know— is one of the leading companies in perimeter security and safety equipment. So it's a very major part of the business for us.

Okay. And I don't, I'm not an expert in this space. My impression is they'll be very long range infrared cameras or a newer type of security way of doing things? Is that true? Is this early on in the use of infrared, particularly long range infrared security where there's a big runway?

Definitely for— yes, definitely for counter UAS. So counter UAS and perimeter security, they have not been really used too much until now. In Border Patrol, G5 actually has quite an installed base there. Now in the past systems were not as long-range because the technology advanced and especially the ATCOM capabilities that G5 has now with stabilization that significantly improved that. But also in Border Patrol, the cameras were not as widely spread as they are now. Now they're talking about putting these towers every couple of miles. So it's a much larger install base coming. In perimeter security, I mean, this is now really growing. This is every data center. When you look at it now, the data centers are like Fort Knox. They're secured with radars and with the most advanced systems. And so we expect that market to really take off considerably. The relationship G5 has with Motorola is very significant for that. And our sales team of former people are also going to be pivotal at getting us into that. The whole world of counter UAS and detecting drones, and as we all know from the news, that is only getting started. I mean, so it's going to be huge.

Just finally, just in terms of those shipments that pushed out being in this quarter and just in general, are we seeing that coming through? And how do you give any comments on the current quarter, how it's shaping up?

Yes. Al, do you want to talk about that?

So we shipped most of that already, Orin, in the first 6 weeks of this quarter, the stuff that pushed out. My concern is that the supply chain is not speeding up out of China. We did get some good indications that product is being released, but the releases that come are still small, too really too small, to be honest. So on the one hand, we can close the gap. So there's no rollover from this quarter, or we could end up at the end of Q3 coming up a bit short again because of the same sort of roll forward problem. It really comes down to sort of like every day checking with Customs to see what comes through and what's approved and licensed. And it's a day-by-day thing really.

And how is the rest of the business doing in terms of some of the newer programs ramping?

So the new business that we are ramping and particularly in the assemblies and cores, I like this business. It doesn't take up as much space, and it doesn't use as much capital equipment. And with the average sales prices the way they are and the margins, they are historically high for anything else we do, I like it. So I keep encouraging Sam and the sales team to bring in more of the assemblies and core business for sure.

I think we haven't given any update on the Lockheed Martin project. So just shortly, it's going very well and is on track. We are about to start shipping flight-worthy units for actual flight tests of the missiles, which are extremely exciting for us personally. We are moving along very well with Lockheed, both from this program and the two other derivative programs in which Lockheed is already integrating our camera systems into two more programs.

Thanks so much. That's what I wanted to hear.

Thank you.

Thank you. The next question comes from the line of Scott Buck from H. C. Wainwright. Please go ahead.

Hi. Good afternoon guys. Thanks for taking my questions and congrats on the transaction.

Hi Scott.

I guess, first thing guys, hopefully I didn't miss it, but could you give us just a little bit of background on how the deal came together? Were they actively out looking for a suitor or was this more organic in the way it came about?

So like many of the acquisitions we contemplate, G5 is a company we've had an ongoing relationship with, and in this case, it goes back nearly 30 years, well before I even joined LightPath. ISP Optics has been a supplier and partner for G5 back when they were DIOP and later Axsys and General Dynamics, and so was LightPath. We got the feeling that they were about to go out and possibly start shopping around, and we did a bit of a preemptive strike, if you would, and just essentially picked it up before they went and formally engaged a bank. And to that extent, we've always been very clear that we are on the lookout for acquisitions. I think we are being very clear that we could see acquisitions in two forms. One could be like Visimid, a small technical group that adds specific technologies and others would be larger like G5, which would be in the $15 million to $20 million of revenue, profitable with strong margins. And those are the type of acquisitions. We have at any given point in time multiple acquisition opportunities or ideas that we keep on eye out for. We always make sure that any acquisition we do is with people that we know. And if we don't know them, then we proactively engage in some joint projects to get to know each other because as anyone that has done M&A would know the number one reason for sale of acquisitions is culture. A culture fit and getting to know each other is very important for us. In this case, we've simply known each other for a very long time, so it was very easy.

Great.

If I could add on to that, Glenn. We mentioned that this is not the first time for this group to come together and create a company. They didn't have a good experience the last time. Sort of the last time they sold, it was General Dynamics. They picked it apart, used the technology, moved it around the planet, and the current owners, sellers didn't really like the outcome that came with that for the people that were working there and had been loyal to them. So Sam is 100% right in terms of cultural fit but also strategic fit and our plans for them is to grow that location the way the original founders imagined it and continue along that path.

Great. I appreciate that, Sam and Al. That was helpful. And then second one, just a quick modeling question. Is there any seasonality in their business that we should be thinking about as we model the out quarters here?

Yes, there is seasonality. I'm not 100% confident yet in how it looks, but typically, if you're using our fiscal year, their third quarter Q3 and Q4 are light on revenue, and then Q1 and Q2 is heavy on revenue. I don't have the exact mix. It's really something I want to confirm with the management team next week when we start going through the more detailed forecast versus the ones we used currently and get a better handle on it.

Great. I appreciate it, guys. That's all I had. Thank you.

Thanks.

Thank you. The next question comes from the line of Brian Kinstlinger from Alliance Global Partners. Please go ahead.

Great. Thanks so much. With the $55 million revenue target, it implies significant growth from G5 from the $15 million. I joined late, so hopefully I'm not repeating. I just joined when Glenn was asking questions. Have the few programs that you expect to drive this growth with G5, are those awarded? Have you started shipping against these contracts or subcontracts? And at what point do you expect these shipments to meaningfully ramp in order to achieve this growth?

Yes. So one of the programs, the Border Patrol, they received the first order last month and have already begun shipping towards that. So that one is already in the pocket and confirmed. The second one, the naval shipments, we expect any day now the purchase order for that, and those would be for the initial seven units, I'm not sure, something around that, where towards the end of the year, that will scale into low rate initial production. Other than that, many of the programs are in all different security and defense, some confirmed and some fairly confident. But I'd say that in this case, the founders and the owners of G5 literally put their money where their mouth is by putting a significant bet onto their earn-out that is for the next 12 months and designed around them hitting revenues of between $21 million to $27 million.

Yes. And then given the commentary on seasonality, at least the modest knowing that the March and June quarters are their weakest, will LightPath as a combined company be profitable, assuming you close as expected and you have a full June quarter? Will that be a profitable quarter from an EBITDA perspective?

Al?

From an EBITDA perspective, we should be positive.

Great. And then again, sorry, I missed the prepared remarks. Can you comment on whether you're beginning to see a ramp in the MANTIS orders? I know last quarter you commented you expected several customers would begin ordering in the second half, and here we are. So I'm curious, has that ramped as you'd expected?

Yes. We've already been taking orders and shipping more and more of the furnace camera orders. The gas detection ones are not ramping as fast as we thought they would. I think for the gas detection, we still need to go through some quantification tests of measuring or giving an actual performance number of how much gas it can detect in parts per million. That's something that we didn't realize we really can't begin significant sales before we have that. That's ongoing right now at the customer site in Salt Lake City. So I'm hoping that the gas optical gas imaging cameras will start scaling up very soon.

Great. The last question I have, I don't know if you addressed this. Is there anything that keeps you up at night about tariffs, whether it's for your customers, whether it's for your suppliers, anything that you're carefully watching?

So we started almost immediately passing through tariffs to our customers, and we are being transparent. The customers see it. They know it. This includes purchase orders already in house. For the U.S. market, our customer base seems to have accepted the fact that this is happening.

Yes, I would add, Al, I don't stay up at night because of the tariffs. I don't think that will be impactful to us. I do worry about the supply chain of materials. The side effect of when China announced the ban on germanium and suddenly companies like Vital Materials stopped exporting any materials, period. That took us completely by surprise and isn't over yet. Companies like Vital still aren't selling materials altogether, not only germanium. I worry a bit more about that part. But there are many players, LightPath is one of them, but there are many players working day and night to recreate the industrial base in the U.S., thankfully. I'm very confident about that longer term, but I think we do still have a few months of transitory effects related to material supply.

And then I have one follow-up. I mean, you clearly have been preparing for this for many years. There's no doubt about it. But my question would be, what percentage of your business relies on imports from China?

Well, Al, what's the... I mean, when we say imports from China, it could be also like our regular glass lenses made in our China operation.

Yes. From an overall perspective...

Sorry, maybe I'm just thinking about the material, I mean, you're talking about...

Oh, the material?

Gushing germanium that's having trouble.

Yes, yes.

It's a funny thing. So material called zinc selenide and zinc sulfide, that's available from other countries, but we were just buying it from a Chinese vendor. Our supply of that material out of China was just stopped. So about— from a revenue perspective, Brian, it's $8 million, let's call it $8 million into Europe and the U.S. coming out of China. The germanium risks are the ones that I mentioned earlier, $2 million in the U.S. and $2 million in Europe. Obviously, the U.S. is high risk. Europe is, I would say, moderate risk at this point. That's kind of rough numbers, high-level numbers. And Sam is right. We knew what the germanium was and what the risk was and have known for a while. We've been trying to get out of it for a while, to switch customers. The surprise that came in the quarter back in December is companies like Vital, who just shut everything down. Nobody could have predicted that, and our competitors and customers are all in the same place as we are.

Okay. Thanks for taking all my questions. Congrats.

Thank you, Brian.

Thank you. The next question comes from the line of Richard Shannon from Craig-Hallum Capital Group. Please go ahead.

Well, hi, Sam and Al, thanks for taking my questions and congratulations on the acquisition. Looks like a really nice deal. Let me ask a quick high-level question following, Sam, your comments in your prepared remarks about G5. You said they had a really big pipeline. Can you quantify or characterize that in any way by itself or relative to the pipeline that LightPath has itself?

Yes. So I think the programs of record that we are seeing, the Border Patrol and the Naval, those vary in our what we expect them to be in full production from typically those programs are anywhere from $5 million to $20 million a year in what the potential during production will be. These military or defense-related programs of record are typically 8 years of rollout followed by many years afterwards of spare parts and repairs, which are very lucrative. We are looking at the business that could easily be alone in the $50 million to $60 million in a matter of 2, 3 years.

Okay, perfect. That's a helpful way to think about it. You mentioned a number of applications for the products from G5 here and all of them sound interesting. Border control, obviously a key thing for in our current U.S. administration. Data centers obviously resonate with everybody tracking AI, but one that's really stood out to me and I'm really interested in is in drones or I think you see UAS or some acronym I don't really understand. Maybe you can talk about what's going on there. It sounds like a particularly useful and extremely important near-term application for the defense community. Maybe you can talk about what's going on there and how big of the pipeline are you expecting from that?

Yes, yes, definitely. So that's the largest program to begin with, the Naval program. And that's also the largest customer in Motorola. I think a lot of their systems go into that. Essentially, this is how do you detect drones or other small objects moving in the best way without any active measures necessarily. Of course, a lot of those could be detected with radar or active systems, but those oftentimes give out too much information about your location and where those systems are, as we've all seen in Ukraine. So you end up needing a passive system to be able to detect drones and other small objects. A few technologies are being looked at. There's acoustic technologies trying to detect the noise of the drone. There are different microwave technologies trying to detect the transmission of the drone if it's transmitting and so on. But by far, the best technology known right now is those infrared cameras. It has to be an infrared camera and not a visible camera because, of course, you need to be able to see at night without the lights flashing and in many different conditions. Right now, those are mainly midwave cameras, and that's what G5 is offering. They will also be expanding into shortwave cameras or even multispectral, both shortwave and midwave together because shortwave cameras can see through clouds, for example, or could see through different adverse environmental conditions. This is where our BlackDiamond materials, designed for multispectral imaging, will play a major role together with the G5 technology. What we are seeing is these cameras selling multiple times in important locations that are very sensitive on pan tilt systems that are rotating and looking around. You're talking about cameras that can zoom 20x as much, starting from a very wide field of view and zooming into small objects. Again, they can do, the performance is just astonishing to be able to detect a tiny drone from 10 miles away is optically very impressive technology.

Okay. Some great detail there, Sam. I think in the interest of time, I will get back in the queue, but thank you very much.

Thank you, Richard.

Thank you. As there are no further questions, I would now hand the conference over to Sam Rubin for his closing comments.

Okay. Thank you all for attending. Very, very exciting times for us. If it wasn't apparent from our remarks, we are extremely excited and happy to be able to be here at this point with this deal. I look forward to meeting some of you in person at our Investor Day on February 25. I would also like to end the call by welcoming the G5 team to the LightPath family. We very much look forward to working together and seeing what great things we can achieve together soon. Thank you, everyone, and good night.

Thank you. Ladies and gentlemen, the conference of LightPath Technologies has now concluded. Thank you for your participation. You may now disconnect your lines.