Our next and final company on today's RedChip Future Tech Investor Conference is Syntec Optics Holdings, ticker OPTX on the Nasdaq. Presenting today will be Chairman and CEO, Al Kapoor. Wait for Al to join. While he gets ready to join us, let me just get over some preliminaries here. Of course, we want your questions, as always. Type your question in the text box after you have clicked the Q&A button at the bottom of your Zoom window. If you are joining us on social media, welcome. If you want to submit a question, you'll need to join the Zoom webinar by using the code there next to the window. Again, if you want to submit your question, Q&A button at the bottom of your Zoom window. Let me now read the safe harbor statement. This segment may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements pertaining to future financial and/or operating results, along with other statements about the future expectations, beliefs, goals, plans, or prospects expressed by management, constitute forward-looking statements. Any statements that are not historical facts should also be considered forward-looking statements. Of course, forward-looking statements involve risks and uncertainties. Al, are you there? Yes, I'm here. Al, great to see you. Welcome to RedChip. Thank you. Thank you for having me. You're welcome. Would you like to show your presentation? Sure. Okay. I can share and bring it up now. Share your screen now. Yes, let's set that up. Okay. Yep. Perfect. You are ready to go. Can't wait to hear what you've got to say, Al. Sure. I'm Al Kapoor. I'm the CEO and chairman, founder of the company. When I first made a presentation, I said, Optics and photonics and light will be everywhere, and more products would be light-enabled. At that time, people said, Well, it was fiber optics. What could it be more? At that point, it was just a vision. I said, It'll be a lot of different things. Many we don't even know, but space, defense, biomedical, and many more consumer things. Here we are, I don't know, almost two and a half decades later, and finally, there's more disruptive growth, and you'll see why. Our strategy's fairly simple, right? We have a large addressable market. We've been blessed with that, so we don't think about that as much. 15% of the global economy has now become light-enabled. There's a reason for it. There's an underlying factor where people want, their OEMs want their products to be more automated. They want to be more intelligent. One way to do it is you bring light and bring photons in. Already, in the past two decades now, all of a sudden, 15% of the GDP of global products, per SPIE report, says they are some form or the other light in them. If you have your smartphone, Apple or whatever, you have cameras that makes it smarter, and so on and so forth. We are these diverse products, so that's another kind of good part of where we are, where we sit, because we have a shot at a lot of different end markets, and I'll show you more of that. That sort of gives you a little bit of a cyclicality going from biomed to space and defense, growing budgets of defense tech. It gives us a nice balance. In the 20 years, when there have been times where one end market was down, the other one was up. We've seen that kind of influence that we like. Operations. We currently, our portfolio of products that we're launching, with our customer, with OEMs and ourselves, are within our capability. They are customers that we've had, and we've proven ourselves to markets that we've played in. We feel like we are leveraging that for us at this inflection point where the demands are bigger for the products that we make. Everything we do, you'll get a sense of, hopefully, by the time this presentation ends. It's mission-critical. Every OEM that we work with, they are leading in their industry, and we are always doing something for them that is super critically. We have strong employee base up in Rochester, N.Y. One in five employees have been here for a decade, so that does well for us. The journey of our advanced optics has been a long one, right? If you look at McKinsey and how they describe what the frontiers are in technology that people are seeking, there's artificial intelligence you hear about all the time in data centers, in goggles or AR/VR. They are all sort of merging together. You're using AI in the AR/VR goggle space. You're also going to use AI there. They're not all mutually exclusive, they're all the frontiers that investors are typically seeking from a technology perspective, we get to play in most of them, or all of them. We are supporting surgical robots with their connectivity. We're in data centers. We are doing AR/VR goggles for defense, and surely space. We've talked about that a lot in our market. We have some baseline products over the years that we've developed, like night-vision goggle, where about 30% or so of the night-vision goggle that goes to soldiers right now, we participate and make subsystems and systems for it, and so on and so forth. DNA sequencing, medical diagnostic, we had a recent press release on those. That gives us a good base, and the big growth areas are space and defense tech. One more point, at the facility, we have a lot of different optical technologies and capabilities under one roof. We were a little forward-looking back two decades ago when we were putting these together. Now when we have OEMs walk by, they are amazed at all the different capabilities. They work together. It's kind of remote, because these type of capabilities are not all under one roof, and they require a lot of ultra-high precision advanced manufacturing that we do. What's unique in this is, say, you have to make a micro camera. We believe we are the only ones to make those type of cameras. A lot of that capability went to China. With the NDAA coming up that we've talked about in our past releases, these things have to be done in the U.S., we happen to be in that spot where we have all these integrated capabilities, where if a customer comes by, they know things will get made here. We can make all of the optical elements. If you look at a micro camera in your phone, it has actually many elements in it. There are glass elements, there are polymer elements. They have to get put together, mechanical elements, they have to get combined with a sensor. That is a really interesting space for us, where we use all of these optical technologies that are there and not quite easy to find in this country or elsewhere in the world. In defense tech, for AR/VR, those cameras are needed. We have found a space there, we also can do all the display side. In AR/VR goggles, you need to display the information that you're gathering using AI software from all different sources, from unmanned drones to unmanned warfighters to unmanned other soldiers, that they all share information. In the future, they will be sharing them, all of that will be displayed. We will be part of that display side, hopefully for a decade, which is where the defense world is moving, the government's moving. We're also on the sensing side, where we should be able to sense the signal and contribute to the signal before it gets displayed. For space, there are other capabilities that we have. We use a lot of our nano-machining capability. A lot of what we do is nanoscale in our optics, because they have to be super accurate for LEO satellites to be able to communicate with signal, and other opportunities that we have are going to go in space. We anticipate good growth in that sector. As I mentioned, what makes it unique, all of these areas, because they are at the cutting edge, they need to be very precise. Not only are OEMs adding optics and photonics to their product to make them more intelligent or to make them. Because you have to sense, image, and detect. Those are ways you can add intelligence and automation. Not only that, but you're doing it at sort of nanoscale levels and in every area, it happens that way. The newer space things that we would be doing coming here this year and hopefully forthcoming announcements that we have alluded to in other announcements we've made, we will be talking about some other mission-critical products that are needed for this thriving space industry, where we believe the United States is almost, if not a decade, quite a ways ahead of the rest of the world. How would we grow? We have a lot of organic tailwinds for organic growth, we would like to grow by acquisitions and by add-ons. We recently raised capital and were able to put capital on our balance sheet. That improved our balance sheet also gave us the ability to go into acquisition conversations with saying that we have part of the capital already sitting on the balance sheet. In terms of opportunities, I've given keynote talks in the past where I've talked about a long tail, where in this field, there are over 4,000 companies or so and of sizes that we can add on to us. We feel optimistic that there will be a lot of opportunities in front of us that we should be able to bring in organic growth on top of a solid base of organic growth. Our financials, one of the things that we have been working on to create more consistency in our numbers. In terms of EBITDA, we have shown, demonstrated, that we can hit about 20% levels of EBITDA. We haven't done that consistently. In fact, we've had some quarters where it has tailed down quite a bit. That prompted me to take an active operations role and be the CEO as well of the company. I have gone in, then created with the team to build operational models for efficiency and scaling. The key for this business is there's a lot of growth in front of us, but we're still doing things that are very difficult to make. The key is to can you make them efficiently and can you make them at scale? Because things are ultra-precise, and to make ultra-precise things at scale requires a lot of diligence, a lot of discipline. By introducing more operational management tools that I have, it's just beginning to show. We are anticipating this quarter for these tools to be able to work and create the kind of transparency and visibility for people to catch issues early, and if there's an issue, to solve them quickly. In that manner, it creates efficiency and it also tells us where the soft areas are to go shore them up and meet customer demand. We feel good about that. Here's a slide that was put together a little while ago. Sometimes people are very curious about valuations. Valuations that I'm just putting a few companies up here in optical systems that either do glass optics or polymer optics, and we do both. Then we cater to the defense tech and the space tech sectors both, besides a base with biomed. It just sort of gives us a range of where we are and where we anticipate, and we believe that we should be able to sustain our valuations in the market. It'll all depend on how the economy does. We have a lot of sectors that are somewhat independent of the macro trend. In terms of space, those investments will continue to happen. Defense tech, the budgets will grow, hopefully we anticipate to be beneficiaries of that. Then in biomed, it's usually things that continue to grow, continue to be around because people do need care, and we are in some critical care elements. I will stop there and open up to any questions you have. Hopefully the presentation was able to give a good overview of the company. Al, thank you very much for that excellent, compelling presentation. We've got a lot of questions already, let me just remind the viewers if they want to submit even more questions, click the Q&A button at the bottom of your Zoom window. Use the text box that will appear to type your question into, then send it right on in. As I said, we've got people writing in already. Al, do you think investors generally underestimate just how critical optics have become across industries? Yes. It's been a big part of us being able to go talk about it. When I do give keynote speeches, it's usually the audience is very technical and the physics that's involved, and other sciences. I think that I do believe by this year, there should be a wider understanding of how critical these technologies are to our country, and I think the government's done everything to protect that, and therefore the growth should come. As it gets more and more folded into, like I said, more and more people want to image, detect, sense to make their products smarter and make their products more automated and intelligent. I think more and more people will learn about it and become aware of it. It's like, I don't know, 30 years ago, somebody would say, hey, somebody would tell you about a Volkswagen Beetle, and if they tell you, then you see them everywhere, right? If I tell you optics is in almost everything, you will notice it. I think investors should notice in the next six to eight months, if not a year. Good segue into the next question here, Al. Has to do with the next 12- 18 months. This person wants to know, how big is the opportunity for Syntec in the AI infrastructure build out looking ahead the rest of this year, even into next year? The AI opportunity and data centers is one, and data centers need more optical connectivity. We do optical connectivity for surgical robots, and we do it for the data centers. We had one product in, and that product was going to get replaced by another one. We're still looking at how quickly that can happen, or there will be a longer tail to a product that we already had. We're in the middle of that, so it's hard to predict. I'm assuming our sales in that area may have been about 5% or so this year. Compared to the last two years, it was a lot higher. Prior years, it's been higher. It's just a matter of the newer version of the product that we're working on, how the dynamics will go Which end markets do you believe are currently creating the most compelling opportunities for Syntec? Space tech, we've arrived, right? Our partners are, of course, the top company, and we will grow there. The satellite launches will increase. Opportunities are also anticipated on the space tech and the defense tech. There will be some overlap, and I think the next big opportunity for us will be in that overlap in reconnaissance and other things we anticipate. We have been working on another product line for about five, six months on some other critical things about safety and launch of these satellites in space, and investors should be hearing more about that here in the next three months. Lots of questions about barriers to entry. What makes it hard for competitors to replicate what you're doing? Yeah. All great questions. I think the vertical integration and the horizontal integration is a hard part. These are things somebody should have started on 20 years ago to be able to do it, but at that time, when we were doing it, people were like, Why are you all putting together these type of technologies that sound disparate? But where we've come is all of a sudden you look back and say, Wow, I'm glad we put those together, because they all connect with each other. For example, if you're doing space tech and you're doing the next generation optics for satellite, which are 300 miles away, and you're trying to catch a signal the size of a baseball at orbital velocities of 27,000, they need to be super accurate, right? Just to make blanks for them to make the final optics is also equally challenging parts. If you're vertically integrated, you can make the blanks, you can do the optics. It's a huge advantage for us. It's the same thing that works in micro cameras, to be able to make all the polymer lenses, the glass lenses. There are not many companies in the world, if any, can do all that and make all the mechanicals yourself, and then be able to put them together and actively align them and attach them to your sensors to make them into a micro camera that operates at the limit of physics. Those are not easy things. When customers come to Syntec, are they increasingly looking for individual optical components, or are they looking for more integrated optical systems and assemblies? The trend is towards more and more optical systems, and so all our major lines are now going to be, which are optical subsystems that integrate into the OEM's product. We anticipate next big thing that we would do in space would be a lot more integrated towards the end objective that the customer has, versus componentry. Like this camera as an example. We're not doing components, we're doing the entire camera. Thanks, Al. What characteristics are you looking for when evaluating potential acquisition opportunities, and how do those opportunities fit into your broader strategy? Yes. Something I think about every day for the company, and there are lots of opportunities, what vectors we can pick. One way to think about it is spectrum of light, and our current work is more visible and near IR. There's a lot of opportunity in long-wave IR, so we're looking at opportunities in that direction when it comes to defense tech. We are looking at opportunities which may be more integrated. Someone asked that question prior to this one, where there's more integrated systems. There are opportunities we're looking at where we could acquire customer lists for the more integrated systems, and then be able to make all the componentry of different types under the same roof because of the horizontal integration that we have. I think there are a lot of different ways to think about it. It's the value chain. You can think about through a value chain. You can look at it from a spectrum perspective. You can look at it from a more customer acquisition perspective. All of those opportunities are available. Companies still are smaller, and therefore, they are good acquisition candidates. The fact that we've developed these operations models, we know that we can go in and try to trend the EBITDA over the long run towards that higher number, double-digit number. Person wants to know how big your addressable market is for satellites. Satellites, the total addressable market, of course, is big. It's going to be in trillions by, what, 2040? Right now we are doing laser optics. We would soon be doing detection optics, and then we will also be going to reconnaissance optics. That's the track we're on. Those type of markets are billions dollars that we're directly addressing, but the larger market of satellites is much bigger, of course. While you successfully quadrupled space optics production in March, Q1 gross margins were still squeezed by temporary shipment delays. Can you walk us through the specific logistical bottlenecks that caused these delivery frictions? Can you clarify whether your recent $20 million capital raise will be used to resolve them or to pursue new acquisitions in high growth sectors such as defense or hyperscale AI? Yeah. Great question, again. We made an announcement, I think, this week, about the delayed purchase order, we finally got it all sorted out. That is the one that we were holding back, that we didn't do a lot of production on, and we sorted that out. Because of what I was saying initially, that we are somewhat no company can perfectly be as cyclical in any way. But our bottom line, our low end can get protected a little bit. We had this big surge we were able to do in the space side, whereas the biomedical didn't contribute as much, and we were still able to stay in that six and a half, seven and a half band, to hold up, but surely for recovery this quarter. Al, for the final question, we'd like you to go into a little more detail, not that you haven't been going into detail so far, but even more detail about your long-term vision. We think the company's fascinating. We've been getting a lot of questions about this. Not just the value proposition, as important as that is. Yeah Go a little further. What's the whole vision here? Yes. The question is: How do you align with American manufacturing and American innovation, and what would happen in our country over the next 10 years? If you look at that stack, clearly, there has been pullback from software. How many companies will be there delivering AI software? How big a share of our wallet they're going to have? This is all becoming clearer. Everybody's willing to pay for more AI. However, on the flip side, the hardware side is going to, in our opinion, thrive, and we're aligning with that. Where that happens is you have to power these data centers. You have to compute in these data centers more and more because AI needs all of that, a lot of data. There are other places which are going to be very safe from our perspective, because government has more spend on defense tech. Space tech, as I already mentioned, we are quite a bit ahead of the rest of the world, and that growth will continue while others catch up. We are aligned. Our goal is to align with the very best, number one OEM in our spaces. Provide them what seemingly seems impossible, through the optics and photonics work that we do through very different capabilities that we have put under one roof. These things will all thrive, right? More data centers will grow. They have to be powered. They can get powered now from actually satellites. We've aligned with companies there that may be more earlier stage. We've aligned with other companies that from satellite want to do multispectral. That's coming maybe five years from now, that becomes more mainstream. Things that are happening here now, right? You need safety. There's rockets and other things leaving debris behind, right? China shot down a satellite to just show us that they can disrupt the space system, but that leaves debris. Those are good problems to solve that we want to align ourselves to be able to be part of. Space, defense, powering of the data center through either space or other ways that we have talked about a little bit in our different press releases and, surely computing inside the data center through connectors that we make that are micro-level optics that we also have expertise in making, and we think that we should have good growth there. Put more patience is needed there. Al, great presentation, great company. Thank you for that detailed answer. Again, it's Al Kapoor. This is Syntec Optics Holdings, OPTX on the Nasdaq. For more information, please write us at optx@redchip.com or call us one eight hundred REDCHIP. Al, thank you again. Welcome. Thank you for the questions.