Glenn Mattson

Glenn Mattson inquired about the reported decrease in pilot headsets/aviation heads-up display revenue, the sustainability of the significantly lower SG&A, and the role of the medical business in Kopin's two-year outlook, specifically regarding the HMDMD partnership.

Answer

CEO Michael Murray clarified that the decrease in pilot headsets revenue was a timing issue, a manufacturing-to-demand push. CFO Erich Manz stated the lower SG&A is not a new run rate, attributing it to one-time litigation accrual reductions. Michael Murray added that the appeal expense is a one-time $500,000, with SG&A normalizing in 2026. Michael Murray confirmed HMDMD's growth, its partnership with Carl Zeiss, and Kopin's work on other medical products, also noting increased interest in armored vehicle systems.

Glenn Mattson of Ladenburg Thalmann inquired about the reported decrease in pilot/aviation heads-up display revenue, the expected run rate for SG&A expenses following the significant sequential drop, and the role of the medical market, including the HMDMD partnership, in Kopin's two-year outlook.

Answer

CEO Michael Murray clarified that the decrease in pilot/aviation heads-up display revenue was a timing issue due to a manufacturing-to-demand push. CFO Erich Manz explained that the Q3 SG&A reduction was due to one-time litigation accrual adjustments, and the run rate would normalize. Michael Murray added that HMDMD is growing, partnering with Carl Zeiss, and Kopin is exploring other medical products, alongside increased global interest in armored vehicle vision systems.

Glenn Mattson of Ladenburg Thalmann & Co. Inc. asked for an update on the manufacturing automation initiative, its expected impact on gross margins, and which suppliers Theon International might have used previously for similar products.

Answer

CEO Michael Murray stated that the first phase of optical inspection automation is complete and is expected to yield $1 million to $1.5 million in OpEx savings in the second half of 2025. A second phase, to be implemented by year-end, is projected to save an additional $1 million in 2026. Regarding Theon's prior suppliers, Murray deferred, emphasizing the partnership's focus on developing new technology and building Kopin's application-specific solutions in Europe to serve the European market, leveraging Kopin's existing European OLED production capabilities.

Glenn Mattson inquired about Kopin's international growth opportunities, asking for more detail on key regions and the timeline for converting pipeline into revenue. He also asked about the impact of factory automation on gross margins and when improvements might be realized.

Answer

CEO Michael Murray identified Europe, particularly via its Scotland facility, and Korea as the most critical near-term growth areas, with Japan also presenting significant opportunities. He noted the company is pursuing partnerships and potential joint ventures to capture this demand. Regarding automation, Murray explained that a new camera-based inspection system is expected to be online in June, which should drive several points of gross margin improvement by enhancing quality control and reducing operational expenses.

Glenn Mattson of Ladenburg Thalmann questioned the dynamics behind the Q4 gross margin dip, the outlook for margins in 2025, and requested an update on the Blue Radios lawsuit and associated future legal expenses.

Answer

CFO Richard Sneider attributed the Q4 margin decline to inventory reserves on older products and some production inefficiencies, which automation will address. CEO Michael Murray added that product mix was also a factor and pointed to Q3 2024 as a better model for future margins. Regarding the lawsuit, Murray reported no new court updates but expressed confidence in their appeal strategy. He anticipates a normalized cost structure going forward, with potential one-time appeal costs being 'sub-$1 million'.

Glenn Mattson asked for clarification on the rapid capacity expansion at Visimid, its implications for the Lockheed contract, and other potential work. He also questioned the sequential gross margin decline, even after adjusting for inventory write-offs, and the normal run rate for operating expenses.

Answer

CEO Sam Rubin explained that Visimid's expansion supports both the NGSRI program and other uncooled products like optical gas imaging and drone cameras. CFO Albert Miranda clarified that adjusted gross margin was around 29.7% and that OpEx included significant one-time expenses related to G5 integration, M&A, and IT cybersecurity upgrades.

Glenn Mattson asked for clarification on the rapid capacity expansion at Visimid, specifically whether it signals confidence in the Lockheed contract and if other projects would utilize this expanded capacity. He also inquired about the sequential decline in gross margin, even after adjusting for inventory write-offs, and whether the current OpEx run rate was sustainable given one-time expenses.

Answer

CEO Sam Rubin explained that Visimid's expansion to a 10,000 sq ft facility supports both the NGSRI (Lockheed) program and other uncooled products, including drone and optical gas imaging cameras. CFO Al Miranda clarified that, after adjusting for a $0.5 million inventory write-off and other one-time items, the gross margin was approximately 29.7%, with a typical product mix. He also noted that the OpEx was elevated due to one-time costs such as G5's full-quarter OpEx, M&A legal fees, and significant IT cybersecurity investments.

Glenn Mattson asked about the strategic implications of expanding capacity at Visimid, the core technology for the Lockheed contract, and whether other projects would utilize this capacity. He also sought clarification on gross margin dynamics, particularly after adjusting for inventory write-offs, and the normal run rate for operating expenses.

Answer

CEO Sam Rubin explained that Visimid, originally a small engineering firm, is moving to a larger 10,000 sq ft facility to support the NGSRI program and other uncooled products like optical gas imaging and drone cameras. CFO Al Miranda clarified that adjusting for the $0.5 million inventory write-off and other one-time items, the gross margin would be around 29.7%. He also noted that the current OpEx is not a normal run rate due to one-time expenses from G5 integration, M&A legal fees, significant IT cybersecurity costs, and increased marketing spend.

Glenn Mattson inquired about the nature of the delays in the Apache program, sought more details on a new fast-paced project involving BlackDiamond (BD) glass, and asked for clarification on the gross margin outlook following the G5 Infrared acquisition.

Answer

Executive Sam Rubin explained that the Apache program delays were internal, stemming from capacity constraints for the new BDNL-8 material, and were not customer-related. He described the new BD glass project as a rapidly advancing, government-funded redesign of an existing system with a potential annual revenue exceeding $10 million. CFO Albert Miranda confirmed that gross margins are expected to expand in the upcoming quarter due to a full period's contribution from the higher-margin G5 products.

Glenn Mattson sought clarification on G5 Infrared's large programs that are 'about to be awarded,' the timeline for these programs moving into production, the potential to use G5's contracts to cross-sell LightPath products, and the company's current exposure to Chinese supply chain issues.

Answer

CEO Sam Rubin stated that one major naval program award is imminent, with prototypes expected in 6-8 months and low-rate production by year-end, potentially representing $10-20 million annually. He confirmed that cross-selling uncooled cameras into these programs is a key strategic opportunity. CFO Albert Miranda quantified the at-risk germanium business at $2 million in the U.S. and $2 million in Europe, noting the company is actively shifting to local sourcing for the U.S. market.

Inquired about the outlook for the camera business, the status of the Apache helicopter program, details on two additional Lockheed programs, and the potential impact of the new political administration on the germanium supply chain.

Answer

The camera business is expected to see a strong back half as the sales funnel is building, with industrial sales tied to customer budget cycles starting in January. The Apache program has minor delays but is progressing. The two other Lockheed programs are earlier stage and smaller but are moving along. The company does not expect the new administration to significantly impact the germanium situation, as they have already reduced their exposure.

Glenn Mattson inquired about potential expenses for setting up low-rate initial production (LRIP) with Lockheed Martin and asked about the applicability of the AI-enabled vision camera technology in the UAV space for navigation.

Answer

CEO Sam Rubin explained that the Orlando facility's infrastructure is already in place for LRIP and that capital equipment costs are expected to be covered by the customer. He also confirmed that while LightPath is in contact with companies using AI for UAV navigation, most current applications are more basic, such as target acquisition and tracking.

Glenn Mattson of Ladenburg Thalmann & Co. Inc. inquired about the new home equity product, asking for details on the delayed broader launch, and also questioned the key assumptions behind Beeline's stated goal of reaching profitability by early 2026.

Answer

CEO Nick Liuzza explained that the launch of the home equity product was pushed to October to ensure quality at scale, citing the complexity of the crypto-to-cash process and the massive market opportunity. Regarding profitability, Liuzza detailed a multi-pronged approach, including a $225,000 monthly recurring expense reduction, a $40,000 monthly marketing cut that still yielded higher loan locks, the removal of $500,000 in one-time Q2 expenses, and the plan to be debt-free by November 2025.

Glenn Mattson of Ladenburg Thalmann & Co. Inc. questioned the operational readiness and infrastructure at OAS to support its significant growth ramp, asking about capacity, investment needs, and OpEx. He also sought more detail on the confidence in winning a DoD contract by year-end.

Answer

Chairman, President & CEO Eric Brock stated that the company is actively building its leadership team, advisory board, and partner ecosystem to support scaling. He noted that partnerships and M&A are key to acquiring talent and managing OpEx to achieve operating leverage. Regarding the DoD contract, Brock expressed high confidence due to strong demand and their partnership with Mistral, but set a formal expectation of 'at least one' win by year-end to be prudent, while aiming to exceed that goal.

Inquired about growth opportunities for the Optimus drone in the U.S., the source of funding for public safety and critical infrastructure deals, and the company's potential to participate in broader U.S. defense deals in the Middle East.

Answer

The company is pursuing Optimus drone opportunities with both existing and new U.S. customers in public safety and critical infrastructure, which are funded by a mix of federal, state, and local budgets. While they see potential to be part of U.S. defense deals in the Middle East, they could not comment on specifics.

Asked for details on the $20 million revenue visibility for OAS, including order timing and product mix between Optimus and Iron Drone. Also inquired about the status of the Dubai customer and the enforcement of FCC deadlines for the rail network build-out.

Answer

The company expects the $10 million backlog to be recognized in the first half of the year and is in active discussions for new and expanded programs. No specific details were provided on the Dubai customer's Q4 shipments. Regarding the rail network, the company stated that the railroads have publicly said they expect to meet the FCC deadlines, but Ondas would not speculate on future FCC actions.

Glenn Mattson sought confirmation on the revenue recognition timeline for the $14.4 million in orders, the current status of the Dubai system deployment, the revenue outlook for 2025, and whether Ondas Networks orders would be impacted by existing inventory at its partner, Siemens.

Answer

CEO Eric Brock confirmed the $14.4 million in orders would be recognized primarily in Q4 2024 and Q1 2025. He stated that 8 of the 22 systems for Dubai have been shipped, with the customer still targeting the full amount by the end of 2025. He expects 2025 revenue to start strong and be sustainable. Regarding Siemens, initial orders will be fulfilled from existing inventory, but Ondas anticipates reorders from Siemens in 2025 as railroad deployments expand.

Glenn Mattson inquired about the IDEMS business, asking if more large deals like the U.S. Air Force contract are needed to meet guidance and how that win impacts future sales. He also requested more detail on a new 'top five public safety customer' and asked for clarification on how the $20 million VDR pipeline translates to revenue.

Answer

Co-Founder, CEO, President & Director Ryan Steelberg stated that the Air Force contract alone presents a massive, multi-year opportunity and that its announcement is already generating significant inbound demand across the DoD. He confirmed they have enough business with existing customers to feel confident in their goals. Regarding the VDR pipeline, Steelberg clarified the $20 million figure is a qualified, near-term (3-12 months) opportunity and described the product as 'lightning in a bottle' due to strong product-market fit with major hyperscalers.

Glenn Mattson of Ladenburg Thalmann & Co. Inc. asked for clarity on the expected gross margin progression throughout the year, given the mix of VDR and Public Sector revenue. He also inquired about the nature of the VDR pipeline's growth to $10 million and whether the company is seeing a 'halo effect' where VDR is helping to attract new content customers.

Answer

Executive Michael Zemetra explained that Q1 margins were impacted by the timing of higher-margin Public Sector deals and the initial lower margins of VDR, but he expects margins to improve sequentially through Q2, Q3, and Q4. Executive Ryan Steelberg added that the VDR pipeline growth came from a few significant players progressing in discussions. He confirmed a strong 'halo effect,' stating that VDR is leading to discussions with dozens of new IP owners to become core aiWARE software customers.

Glenn Matson of Ladenburg Thalmann & Co. Inc. asked for clarification on how the new Intelligent Digital Evidence Management System (IDEMS) offering differs from previous public safety products and inquired about the competitive landscape and Veritone's key differentiators in the field.

Answer

Executive Ryan Steelberg explained that IDEMS is a comprehensive suite of applications (including Redact, Illuminate, Track, and Investigate), a significant expansion from the one or two historical applications. This allows for handling larger, diverse data sets and workflows. He characterized the public sector space as a greenfield opportunity, differentiating Veritone by its open platform, aiWARE, which can ingest, index, and correlate disparate data types into a single common platform, a critical capability that closed, single-vendor systems lack.

Glenn Mattson of Ladenburg Thalmann questioned the maturity of the customer pipeline, asking if the company expects to continue closing multiple deals per quarter and if there are other large-scale opportunities similar to the $30 million contract. He also sought clarification on the revenue timeline for that specific contract.

Answer

CFO Conor Tierney confirmed that with 30 customers in advanced negotiations, there is a strong opportunity to convert more deals, particularly in the smart infrastructure space. He noted that a few other opportunities in the pipeline are similar in scale to the $30 million win. CEO and Chairman Matt Fisch added that proposals for these advanced deals are filling up their calendars, suggesting a high conversion rate. Fisch clarified that the $30 million opportunity represents the total contract value, with revenue expected to be recognized over the next two to three years.

Glenn Mattson asked about the maturity of the customer pipeline, the potential to consistently close multiple deals per quarter, and whether any pipeline opportunities were similar in size to the $30 million contract. He also sought clarification on whether the $30 million opportunity represented an annual or total contract value.

Answer

CFO Conor Tierney confirmed that with 30 customers in advanced negotiations, there is a strong potential to convert more wins and that several opportunities in the pipeline are similar in scale to the $30 million deal. CEO Matt Fisch added that the volume of customer proposals indicates more wins are likely in the short term. Fisch clarified that the $30 million opportunity is the total contract value expected to be recognized over the next two to three years, not an annual figure.

Glenn Mattson inquired about the composition and maturity of the company's sales pipeline, the expected conversion rate, and the company's operational capacity to meet accelerating demand following significant cost reductions.

Answer

President & CEO Philipp Stratmann explained that the pipeline consists of qualified opportunities under active negotiation. He expressed confidence in accelerating conversion rates due to a retooled commercial team and favorable market dynamics. Regarding capacity, Stratmann confirmed that the company's facilities in New Jersey and California have been redesigned for scalability, allowing them to meet increased demand efficiently without over-investing in inventory.

Glenn Mattson inquired about the increasingly back-end loaded revenue forecast for the year, the ability to ship finished goods from inventory against existing backlog, and the specifics of the new unmanned surface vessel (USV) program, including whether Red Cat would own a shipyard or partner. He also asked for a capital expenditure estimate for the year given the expansion plans.

Answer

CEO Jeffrey Thompson explained that production and revenue were delayed as they awaited final specifications from partners, which were received in late March. He clarified that while they are moving the FlightWave facility, they are adding a second, non-disruptive location for Black Widow production to meet demand. On the USV program, Thompson confirmed Red Cat will own a boatyard in Florida and is leveraging partnerships for prototypes and technology, supported by government initiatives. He stated that a CapEx estimate is not yet available but will be provided on a future call.

Glenn Mattson inquired about the origins of the Palantir partnership, its integration status, and whether its potential revenue is included in the current guidance. He also asked for an update on the company's funding needs and capital investment plans.

Answer

CEO Jeff Thompson explained the Palantir relationship was initiated by a joint customer request and is progressing rapidly, with initial testing expected within two months. He clarified that the updated guidance of $80M-$120M does not include any high-margin software revenue from the Palantir deal. Regarding funding, Thompson detailed that current cash, a recent $6 million financing, expected warrant exercises, and a pending application for a low-interest government loan from the Office of Strategic Capital provide a sufficient runway to reach the LRIP phase, minimizing near-term dilution.

Inquired about the product mix for the $55 million calendar 2025 revenue guidance, the path to achieving 50% gross margins, details on the recent debt financing and future capital needs, and the potential timing and scope of the Short Range Reconnaissance (SRR) contract award.

Answer

Jeffrey Thompson projected the 2025 revenue mix to be roughly 50% Teal 3 and 50% Edge 130 Blue, with FPV drones contributing a smaller portion. Leah Lunger and Jeff Thompson explained that sustained production of the Teal 3 will enable them to reach 50% margins. They also detailed an $8 million debt financing deal intended to bridge the company to expected contract prepayments in early 2025. Regarding SRR, they have no official timing but speculate an announcement could come in early October, and they confirmed the potential first-year value is around $79 million.

Glenn Mattson from Ladenburg Thalmann asked for details on the product mix for the $55 million calendar 2025 guidance, the path to achieving 50% gross margins, the company's capital needs to reach profitability, and the potential timing and scope of the SRR contract award.

Answer

Executives Jeffrey Thompson and Leah Lunger addressed the questions. Thompson projected the 2025 revenue mix to be roughly 50% Teal 3 and 50% Edge 130 Blue, with FPV drones contributing a smaller portion. Lunger explained that sustained production of the Teal 3 will enable a steady increase to the 50% gross margin target. Regarding capital, they detailed a new $8 million debt facility intended to fund operations until potential contract prepayments arrive in early 2025 without further dilution. Thompson also noted the SRR award could be announced in early October and confirmed the potential first-year value is around $79 million.

Glenn Mattson inquired about the expected timing for signing the SRR contract, the anticipated scope of the LRIP, and the latest on international opportunities with NATO and Pacific allies.

Answer

Executive Jeffrey Thompson confirmed that the features contract for the SRR program was recently signed, with the LRIP contract expected soon and likely to be larger than previously anticipated. Regarding international sales, Thompson explained that the Black Widow drone's unique capabilities, such as Visual Navigation and its robust, non-Chinese origin, make it highly sought after by NATO allies and for new European tenders supporting Ukraine, despite any political tensions.

Glenn Mattson of Ladenburg Thalmann & Co. Inc. inquired about the evolution of FiscalNote's sales force and go-to-market strategy following Q4 2024 execution issues. He also asked about the adoption metrics for the new PolicyNote platform and the timeline for migrating all customers.

Answer

CEO and President Joshua Resnik clarified that recent changes addressed management execution rather than staff reductions, leading to improved pipeline development and better alignment between product and go-to-market teams. Regarding PolicyNote, Resnik stated the goal is to migrate all core customers by sometime in 2026 and begin deprecating legacy platforms in 2025, noting that early engagement data from initial user cohorts is very encouraging.

Glenn Mattson requested more detail on the company's work in the military vertical and asked about the predictability of guidance, questioning if lumpiness from large auto deals has diminished with the shift to SaaS.

Answer

CEO Keyvan Mohajer explained that their work in the military and with first responders focuses on safety and efficiency, often delivered through partners. CFO Nitesh Sharan stated that while the growing SaaS mix improves predictability, some lumpiness can still occur from large customers who prefer licensing deals, though the company now has more leverage in negotiations. He expressed overall confidence in forecasting due to a strong backlog and pipeline.

Glenn Mattson of Ladenburg Thalmann requested clarification on the 2025 revenue guidance, comparing it to the pro forma annualized revenue from the Amelia acquisition. He also asked about the operational process and timeline from winning a large QSR contract to achieving full deployment.

Answer

CFO Nitesh Sharan explained the 2025 guidance range incorporates prudence as they integrate Amelia to optimize for both growth and profitability, with a goal of reaching adjusted EBITDA positive. Regarding QSR deployments, Sharan noted they are investing in dedicated franchise sales teams and developing agile hardware solutions to accelerate rollouts, citing a recent creative deployment at White Castle. He also highlighted the strong inbound demand from major restaurant brands.

Glenn Mattson of Ladenburg Thalmann asked for clarification on the 20%+ EBITDA margin target for H2 2023, the timeline for new Illinois retail stores to become a net positive, and management's perspective on the evolving regulatory environment in New York.

Answer

CFO Dennis Olis confirmed the 20%+ EBITDA margin target is for the second half of the year on average. Chief Transformation Officer Greg Butler explained that the net benefit from new Illinois stores will likely be felt in late Q3/Q4, as the market currently faces headwinds from Missouri's adult-use launch and broad price discounting. CEO Charles Bachtell expressed cautious optimism about New York's progress but is awaiting final regulations.

Glenn Mattson from Ladenburg Thalmann requested a comprehensive overview of Jushi's current access to capital, including unencumbered assets and other potential financing avenues.

Answer

CEO Jim Cacioppo detailed several avenues for capital. He noted the company is in the documentation phase to secure financing against its $70 million unencumbered grower-processor in Virginia. Other sources include a significant expected influx from the Employee Retention Credit (ERC) program, the potential sale of non-cash-flowing assets like its California dispensaries, and the ability to finance its unencumbered Ohio facility. He stressed that the primary focus remains on improving EBITDA to strengthen the company's financial position.