Hi, everyone. I'm Austin Moeller. I'm the aerospace and defense technology analyst here at Canaccord Genuity. Today, I am joined by Saleel Awsare, the CEO of Lantronix. Saleel, I guess you've got some slides here. It's just the one slide, I guess, just give a brief overview. Yes. Of the company for everyone and the Lantronix of today. Yeah, great. Yeah. Thank you for having us, Austin. I've been with Lantronix just about 2.5 years. We've repositioned the company, transformed it into enabling edge intelligence with compute and connect, focused on three verticals. This IR deck's online, but I wanted to just show you the three verticals that we're in. The first one, and the one that is growing extremely fast, and I'm sure we're going to speak with Austin a fair amount about that, is our aerospace and defense. Mainly focused in unmanned systems, AKA drones today, but we're going into ground, USVs, counter-drones, all of that, and I'll tell you what we do throughout as we speak in that. The second one is our critical infrastructure monitoring, which we really like because it has recurring revenue themes around it, and it is very sticky, and we are focused selling 5G hardware and recurring revenue based on that. That is our second vertical. And the third one is, which Lantronix has been known for, it has been in the market a little while, which is really our enterprise business. And that business also is a great business. It is very profitable for us. And in the last couple of years that I have been there, we have transformed the model to more of a JDM model, where things that have been commoditized from a hardware perspective, we do not put a lot of R&D resources in. But what we put a lot of R&D resources in software layers, device management, things like that. That is what we have all put together. The takeaway is enabling edge intelligence, with compute and connect focused on these three verticals. On the defense market opportunity, in the context of the Iran war and The Pentagon's push for U.S. domestic drone manufacturing, can you discuss the importance of Lantronix's Open-Q SOMs and dev kits to enabling those capabilities across unmanned systems? Great question, and talking about being a trusted supplier. I will start with that today. Some of you might have seen The Wall Street Journal this morning. A company that makes USVs or unmanned boats, they found Chinese components in there that were in the camera that was transmitting data back to China. That is in today's Wall Street Journal. Oops. Just a little oops. Yes. It's in the U.K.'s Navy, by the way. It's a big article on The Wall Street Journal today, and they had to turn off the internet connectivity, but then it's useless. Having said that's just a sidebar. Lantronix is headquartered in sunny California. We do a lot of our development in North America between Minnesota and Vancouver, British Columbia. He talked about our Open-Q SOMs. What do we provide? We provide a compute platform or the brains of the camera or computer vision that goes into drones. We either sit in the payload, we sit with the camera, or in the gimbal. We are NDAA and TAA certified, very important. We are 99.9% out of China for any of our manufacturing. PCB, they'll still have to come from China, so we're working on that. We've got a scaling going on in Plymouth, Minnesota, where we've got a warehouse and testing being done. We are adding more capacity that'll eventually give us country of origin, for United States. We'll be working towards that. We bring back the SOMs, which is a System on Module, which is the brains of the camera in this case, in a drone. Comes back to the U.S., we do more final testing, things like that, and then ship to our customers. Majority of customers happen to be with the DoW in the U.S. today, but we are scaling internationally also. This is being trusted. You've also seen the asymmetry that happened, the Shahed drones, what's happening in Ukraine. We can be spending $8 million-$10 million on a Patriot missile to bring down a $40,000 drone. That's where we are behind, but we are working really hard, the United States, in catching up and making drones. Austin and I have spoken, put things in perspective. In Ukraine, for those of you who don't know, they make 5 million-6 million drones a year. The United States is in the hundreds of thousands. We've got a long way to go. Supposedly, the Chinese have over 20 million ready, if they want to do something with that. We've got a long way to go, but having a trusted supplier based in the United States, headquartered here with the software development happening in North America, is a big plus for us. I also heard that Zelenskyy said that Ukraine's going to build 8 million drones this year. That's right. They're ramping up. They're ramping up. They're ramping up a lot because they're the most field-tested right now. Yeah. What does the transition timeline look like for your customer to initially get SOMs, as a test kit or a dev kit, and then evaluate them and then decide, "I want to procure these at volume and go into full-rate production"? Yeah. The best part about being in this market today is the speed and the sense of urgency our customers bring. We got into this market a little over two years ago, maybe just about two years ago. Our first lead customer was, for those of you who do not know, Red Cat Teal Drones. We are 100% designed into Red Cat's Teal Black Widow Short Range Reconnaissance drone. We started working with them in November of 2024. We got them into production in 2025 July, our first shipments to them, and they got their drones out. It can be as fast as six to eight months, as long as 12-16 months, depending on where we are from LRIP to full volume production. To the point that you made, we are making dev kits so customers can develop a lot of their work with that development kit that is out there. More importantly, earlier this year, we announced a Drone Reference Platform. We are probably the first ones to have a, we call it a DRP, a Drone Reference Platform, where not only do you have everything for your camera and computer vision, but also flight control. DRP one got announced, I think, earlier this year. We are now going to be announcing DRP two. In addition, we are also making sure our SOMs get something called, you might have heard of this, Blue UAS certification, which really gives you the highest trusted ability. We have gone through all the work. We have got the work done. We are waiting on the government to give us the final approval, the DoW for the Blue UAS. Dev kits, reference platforms to production as fast as six months, as long as 12-18 months. How important will local AI edge computing, computer vision, out-of-band networks be for remote applications, including where comms or GPS might be jammed or spoofed by electronic warfare where they are operating? Yes. I will break it into two different ones. We will go into out-of-band in a minute, which is more remote management for things like data centers and things like that. I will hold off for that. What I would like you to think about is the need for autonomy, which requires you to have edge compute. My thesis is if you need autonomy and edge compute, Lantronix System- on- Modules is a great way to get there. To the point that Austin made, you are now in spectrum dominance issues, GPS-denied environments, and you need to have decision-making at the edge. That is where having some form of language models, and not necessarily ours, we are not in that. We take other people's models and run them on our module. Make a decision, is that just a battlefield tank or is that a car of a passenger? All that data that is being gathered is now going to be able to be run locally to make decisions where you do not have access to the cloud. That is where edge compute is very important. As for the out-of-band, which you also talked about is edge devices. You know Lantronix has been in the out-of-band for quite a while. This is remote management, where if a network goes down, you can remotely come in and figure out what is happening and bring it up. The newer application that we are starting to work on now, a lot of these data centers are in remote applications. When there is a rack there, can we get an out-of-band system put in there? So there again, having the ability to remote access it, bring it up, do the diagnosis is important, and that is where we are focused on. Both areas, kind of different applications, but similar kind of theme to it. I wanted to talk about your recent acquisition of Vecima's IoT business, the Nero IoT tracking software. Can you talk about the impact of that to Lantronix's margins, how that allows you to cross-sell more of your modems into its customer base? There is 125,000 device tags in there under that business. What can you tell us about that? Yeah. Let me get into that. So why we bought this asset, first of all, three verticals. It fits perfectly well into vertical number two, our infrastructure monitoring. So Nero asset was a division of Vecima. Vecima is a Canadian company mainly focused on fixed wireless and things like that. It was a bit of an orphan division in there. So we worked with them privately to see whether they wanted to move on with that. So it is about $5.5 million of revenue, US dollars, a lot of it recurring to the point about the 125,000 tags that are out there, and we paid about $11.5 million. There was no big process. We worked under the radar to get it done. It is a small acquisition. But two key points. It brought a software package in there for asset tracking, device management, builds on our infrastructure monitoring business, where we have focused mainly on the network operators to manage their cell site towers. That is an example where we are at. So this kind of adds to that for fleet management, restoration equipment. So that is just from a strategic perspective. Additionally, they were using hardware from a third party, one of our competitors. We have, as Austin said, modems, but even gateways that will go in there with 5G capability that we can now cross-sell into the opportunity. They were Uber Canada-focused because they are headquartered there. We happen to have a big presence in Vancouver, so it was easy from a synergy perspective. We can now go after the U.S. markets, where again, having a trusted supplier here, U.S. headquartered, is going to help us. Cross-selling opportunity. Gross margins, so I did not get into that. Gross margin is well over 60% for this business. Accretive from day one, and fits really well as to the vertical we talk about in infrastructure monitoring. So that is how the theme there was, and it is a great deal. If we talk about the enterprise and government markets, what does the growth opportunity look like for your Power- over- Ethernet modems and router products? Yeah. The federal business for Lantronix is rather important and the September quarter is very important because then the budget runs out, and so they buy all their equipment by then. The PoE switches, device servers, media converters, we are on the AVL of many of the government agencies, and that is a good business for us from two perspectives that I talked about. It's in the enterprise area. We've gone to a JDM model, so hardware that was commoditized, we are no longer developing. We do all the software, the application layer. It's much higher than corporate gross margins. And after we had the post-shutdown period, with the shutdown, it was a little slow on that business. It's starting to come back. We'll be reporting shortly, and you'll be able to see the results on that, and we put that as IoT System Solutions in our segment reporting that we do there. We put that in there. But I think it's turned and it's starting to come around. And then the other thing that we've done, enabling edge intelligence with Compute and Connect. We're now starting to put compute platforms in our PoE switches, in our routers, to make them edge devices and to make them smarter. Again, bringing the businesses together. I wanted to talk a little bit about the Drone Dominance Program. Can you talk about your work with some of the manufacturers there and their demand for your Snapdragon 845 Open-Q SOMs on their drones? Yeah. The DDP program or the Drone Dominance Program has got a couple gauntlets. Gauntlet 1 has come and gone, which I would call mainly a dumb drone. Gauntlet 2 has got requirements of some additional intelligence. Gauntlet 3, which is later this year, is where I believe we are the best situated for, mainly because we provide the compute platforms that will give you the ability to go in the dark, to look at the datasets, to run in a GPS-denied environment. So we are working with many vendors, which you and I have spoken about multiple times, in DDP 1, 2, and 3 on the gauntlets, and we are enabling different programs in each one of them. But I believe our sweet spot for highest volume is going to be on the Gauntlet 3, which requires intelligence at the edge, as opposed to just a, for lack of a better word, a dumb drone. Most of the guys we are working with, we are well-positioned as this takes off. The government did about a, I think it is $1 billion for the DDP programs that they have put out there. That is how they are working towards it. They are parsing it out. Majority of the shipments are going to be calendar 2027, and we are enabling that, and we are ensuring we are ready for that. As they scale production on those drones, have you locked in a desired margin or ASP with all of them as they are moving up to higher volumes? Yeah. Obviously, when the volumes are lower, our ASPs are higher. Let me even step back. As most of you know, supply, memory has been an issue. I just came back from Asia a week ago, because we wanted to make sure we were ready to scale. What is happening, Austin, is, give you a perfect example. This quarter, a customer came to us, they won a piece of business somewhere, and they needed 1,000 units quickly. If we do not have the ability to scale and have supply in place, we will not be able to support. We are making two things happen. We are making sure we have got enough of the SOMs ready, and the SOMs are not just one thing. It has got a Qualcomm chip, so we have got that. Because the lead times are going up, we have made sure we have acquired that. More importantly, you guys all know what is happening in the memory business. So we have acquired memories to make sure we can enable our customers faster. We are ready to supply tens of thousands a month if the need be. We have got memory, we have got the ASICs, we have got PCBs surprisingly have become tight. We are making sure to have all that ready because when the orders come, we want to be ready to scale with them. So I feel good. I actually spent a whole week in Asia kind of walking around, making sure our contract manufacturers understand the importance, and a lot of that is in Taiwan because Taiwan's a TAA country. That's where we are ready to scale up on that. Actually, on that point, can we talk about TAA and NDAA compliance rules from components, where by 2030 you'll be able to source chips and boards from, and who you'll be able to source hardware from to do manufacturing? Yeah. The NDAA 848 is the rule. I forgot the whole thing, but it's the 848 rule that says already that the DoW cannot source critical components for unmanned systems from China. That's already gone into spec this year. That is why we are well-situated because the compute module is a critical component. Now, you're still allowed to get rotors and fans and a few other things as you think about it, but the compute module is already considered critical. We are probably, to my knowledge, from a Qualcomm partnership perspective, the only one in the U.S. who's NDAA and TAA certified for the U.S. market. That's important. Couple years later, even components like rotors and fans and motors have to be developed in the U.S. We announced a pretty large MOU that we'll work with, some of you might know this company called Unusual Machines, Allan Evans at UMAC. I think it was about 10 weeks ago, we announced a cooperation. He's ramping up in Orlando. He's been out to see us, where he can be the body, we can be the brains. Kind of joint going after customers, joint enabling situations. Allan's great. He sends us big customers our way. We try to work with him. Creating an ecosystem, and I think that is even more important now as I think about an ecosystem of Western-based suppliers, not only for hardware, but even software. We announced a deal with Safe Pro, and a few others, and I'm sure you're going to ask me about some of them that we're working on. But create an ecosystem of U.S. companies or Western companies, where they can run their IP on our modules. This is all going back to a trusted supplier under the NDAA 848 rule that has come out. What's your view on the Ukrainian drone industry as an opportunity to drive revenue? Just given the interest in Ukrainian companies selling their products to the Department of War, and also their extensive use of Chinese components in their drones. Yeah. So, you talked about Zelenskyy mentioned 8 million drones. A lot of those drones, substantial majority use Raspberry Pi, for those of you who don't know, and that's all made in China. Or a company called Rockchip, which is a Chinese, I won't call it like Qualcomm, but, ASICs that they make. They've had a lock on that market for a while. As Ukraine starts to look not only at Western, but also lessening their reliance on China, are now looking at non-Chinese suppliers. To that end, we announced a partnership with a company called DoD. Happens to be called DoD. They say Estonian Ukrainian, but mainly Ukrainian. A company where they are now working with us. We've already enabled them to provide a solution that they're going to integrate that goes into a camera module that they want to go after. To that end, we'd also announced a pretty big MOU with Swarmer. For those of you who don't know, it's a Ukrainian and Texas company, but similar like that, where we said, "Hey, we're going to work with you guys to create a board using our compute SOM that is really" Generic's not the word, but easily usable into many customers. Because what's happening in the market, there's so many companies getting funding, and they all have to prove themselves, and they need to get to market quick. To that end, creating dev kits, reference platforms, boards, and we talked about this, we do all the software work on it. We do the BSP, things like image stabilization. We learned that working with these Ukrainian companies, because we've been in the field with other guys. We all know that Red Cat's been talking about being in Ukraine, and they've been working on that. We've learned a lot about some of the in-field issues, so we've improved our products and technologies based on that. I believe it's really early days and even if I get 10% of that's 80,000 drones, right? Out of 8 million. If we get 20% of that, it's real. 1% is 80,000. I'm sorry, 10% is 800,000. It's huge volumes. Just put it in perspective, we're just getting started. To the extent that our drone business, as I said, and I did not mention this, but our fiscal year is July 1st to June 30th. We started fiscal 2026 with drone revenue near zero. We upped the number three times this fiscal year, which ended June 30th. We haven't reported, so I won't tell you the final number, but we said it will be between $10 million - $14 million. At that rate, if you pick $12 million as a midpoint, it's already 10% of the company from being near zero 12 months ago. I think you already mentioned Minnesota, but can we just talk about the manufacturing throughput domestically, to be able to meet demand and how that could scale with Lantronix, what's the Drone Dominance Program or just as that 10% of the business grows? Minnesota is very important as we are adding equipment to scale and support U.S. customers. We're also working with TAA countries like Taiwan, Hungary, different other countries in the future, and making sure we've got enough supply ready for that. As it goes forward, manufacturing for fine lines have not started in the U.S. or for the SOMs that we do. So that we still have to depend for Asia, but they're all approved vendors. But testing, finalizing the IP and the software, we're going to move that all to the U.S., and that's going to be that as you think about it. Do I have any audience questions for Saleel? Anybody? Oh. Yes, sir. We work with companies like a Red Cat who's got a Pentagon contract. [inaudible] Not to the DoW. We are one degree removed. But we are Blue UAS. We are in the SRR, that is the Short Range Reconnaissance program. We are not competing for Pentagon contracts because we work in three modalities. One is work with the OEM, AKA Red Cat, PDW, name those. B is companies that make the gimbal, like a Trillium. Yeah, that's right. The third one is just a video module. That's how we do it. We're not at The Pentagon directly competing with that, but they are aware of us, and we're getting the certification, so it's easier for our customers. Excellent. I think that brings us to the end of our time, but thank you so much, Saleel, for just taking the time to give us the latest updates on Lantronix today. I know we all really appreciated it. Thank you so much for your time, everybody. Thank you.