Good day, and welcome to the Precision Optics Corporation's first quarter, fiscal year 2025 financial results conference call. All participants will be in a listen-only mode. Should you need assistance, please signal conference specialists by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a quest ion, you may press star then one on your touch-tone phone. And to withdraw your question, please press star then two. This event is being recorded. I would now like to turn the conference over to Mr. Robert Blum. Please go ahead, sir. All right. Thank you very much, Chuck, and to everyone joining the call today. As the operator mentioned, on today's call, we will discuss Precision Optics' first quarter, fiscal year 2025 financial results, and this is for the period ended September 30th, 2024. With us on the call representing the company today are Dr. Joe Forkey, Precision Optics' Chief Executive Officer, and Mr. Wayne Coll, the company's Chief Financial Officer. At the conclusion of today's prepared remarks, we'll open the call for a question-and-answer session. If you dialed into the call through the traditional teleconference line, as the operator indicated, please press star then one to ask your question. If you are listening through the webcast portal and would like to ask a question, you can submit your question through the Ask a Question feature in the webcast player. We will do our best to get to as many questions as possible. Before we begin with prepared remarks, we submit for the record the following statement: Statements made by the management team of Precision Optics during the course of this conference call may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934 as amended. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements describe future expectations, plans, results, or strategies, and are generally preceded by words such as may, future, plan or planned, will or should, expected, anticipates, intend eventually, or projected. Listeners are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risk that actual results may differ materially from those projected in the forward-looking statements as a result of various factors and other risks identified in the company's filings with the Securities and Exchange Commission. All forward-looking statements contained during this conference call speak only as of the date which they were made and are based on management's assumptions and estimates as of such date. The company does not undertake any obligation to publicly update any forward-looking statements, whether as a result of the receipt of new information, the occurrence of future events, or otherwise. With that said, let me turn the call over to Dr. Joe Forkey, Chief Executive Officer of Precision Optics. Joe, please proceed. Thank you, Robert, and thank you all for joining our call today. The first quarter results that we released today were in line with the expectations we provided on our late September call. As we discussed then, first quarter revenue was significantly impacted by delays in a few production programs. This resulted in underutilization of our resources and negative adjusted EBITDA for the quarter. Wayne will provide more details on these results, but the good news is that the production issues have been substantially resolved, so we expect much stronger revenue and dramatically improved bottom line in Q2 and the rest of the year. What's important is that our long-term view of the markets we serve and our strategy to address them have not changed. In fact, we have had strong success with customer engagements that confirm our market view and strategic positioning. We're on the right track for robust long-term growth. We are expecting to grow all segments of our business, but the most rapid growth will come from production, and the key driver for long-term growth in production is single-use endoscopes. Today, we announced our first production order for a single-use ophthalmic product expected to begin production in January. This is the second single-use product to transition from our product development pipeline into production, and it comes only six months after the first, supporting our long-held belief that our strategic investments in single-use endoscope technology would ultimately lead to substantial revenue growth. Minimally invasive surgical procedures require devices that work through very small incisions, typically 5 mm and smaller, with some even under 1 mm. The natural evolution of endoscopy has been to gradually move to smaller and smaller endoscopes to expand the number of places accessible in the body. This migration to smaller sizes has been accelerated in recent years by the increasing availability of robotic systems, which are better able to hold and control such small tools to make precise surgical procedures practical. POC's focus on micro-optics has always made endoscopy a natural market for us, but augmenting this with the added technology and partnerships required for single-use endoscopy has been a major strategic goal of ours for many years. Our success in this area has its roots in our partnership, which began many years ago with OmniVision, one of the world's largest CMOS sensor producers. OmniVision also recognized the potential benefits of single-use endoscopy and invested in the development of high-quality, medical-grade ultra-small CMOS sensors. Following OmniVision's announcements of the first and second of this new class of endoscopy-targeted sensors, POC and OmniVision jointly announced the successful production of the world's first cameras combining these sensors with POC's optics. We further expanded our capabilities in this area through our acquisition of Lighthouse Imaging in 2021. Lighthouse's unique image signal processing and electronics engineering capabilities dovetailed well with POC's core competencies in optical, mechanical, and systems engineering. This acquisition resulted in a company with a full set of technical disciplines required for next-generation single-use endoscope design and manufacture, utilizing the world's most advanced CMOS sensors, most coming from OmniVision. Collectively, this capability results in endoscopes with big improvements in image quality, even while reducing costs to support single-use economics. For example, our single-use cystoscope imaging system supports 160,000 pixel resolution, while the reusable scope it replaces had only 30,000 pixels, resulting in a greater than fivefold increase in resolution. Similarly, our new single-use ophthalmic endoscope has a fourfold increase in pixel resolution over the customer's predicate reusable scope. In both cases, because the new scopes provide electronic image data, we are able to further process the images to eliminate pixelation in a way that could not be done on the previous versions of these scopes. And with advances in design and construction techniques, we can provide illumination light through much smaller and lower-cost LED and fiber optic assemblies than in the past. Simply put, the response from our customers and, more importantly, the surgeons who use the product has been overwhelmingly positive when they see the improvement in performance. While the extent of such improvements depends on the size and functionality of each scope, virtually all CMOS-based flexible endoscopes will have better image quality than their predecessors built with non-CMOS technology. This means that many medical device systems on the market today, intended for use in minimally invasive surgery and designed more than about six or seven years ago, are potentially obsolete since we can design new products that are clearly superior to them with better technical performance and single-use price points. With these characteristics, medical device companies have great incentive to hire us to apply our expertise and capabilities. Their users, doctors and surgeons, will always prefer clearer, more accurate imaging of the surgical site, and with single-use scopes, they get brand new scope image quality for every procedure. Also, because there is no need to reprocess the scopes, hospital inventory management is greatly simplified. The device companies themselves prefer single-use rather than reusable in order to receive steady demand based on numbers of procedures rather than volatile demand based on the ups and downs of hospitals' capital equipment budgets. And finally, everyone benefits from the improvement in patient safety, with single-use endoscopes virtually eliminating any chance of cross-contamination from one patient to another. It has taken longer than we anticipated when we first started our work with OmniVision many years ago, but with our second single-use program going into production in January and a number of additional single-use programs in our product development pipeline, our strategy of investment in this area is finally starting to pay off. The first single-use program for which we announced the $9 million production order in May is for a cystoscope imaging assembly that we designed and now manufacture for our customer's next-generation AI-powered surgical robotic platform for treatment of benign prostate hyperplasia. Our customer, who is already a dominant player in this market, has been selling their previous system for many years and, after receiving FDA clearance, recently began sales of the new system, which includes our scope assembly. We currently estimate that we will deliver approximately $3.6 million of this product during our current fiscal year, an increase compared to the $2.2 million estimated in our May announcement. Like our customer, we are optimistic the market for treatment of benign prostate hyperplasia, which is already a large market, will continue robust growth. Our customer has been very successful already in addressing this market, and we expect over the long term, our business could grow several-fold as their success continues with their updated AI-driven robotic platform that includes our products. Our second single-use endoscope production order, which we announced just today, is for a very small ophthalmic endoscope that is used for eye surgery to treat glaucoma. Our customer for this product is a large, well-established global market leader in this space. The initial $340,000 order is intended to support initial production ramp with deliveries scheduled to begin in January 2025 and proceed over the following five months. This order will provide starting inventory levels only to support full product launch in June. Our customer has already indicated that follow-on orders to support first-year requirements following launch would likely have delivery rates two to three times those of this initial stocking order or approximately $1.5 million for the first year. This order is the culmination of more than five years of joint product development. This product replaces our customer's current reusable endoscope-based system, which has been in the market for over 10 years. With the benefits of significantly improved image quality combined with single-use functionality, we believe this product will not only replace our customer's existing product but has great potential to increase their market share and, over time, become a major contributor to POC's ongoing production revenue. Beyond these two orders, we have a growing number of single-use applications in our product development pipeline, and we are confident this business segment will continue to drive significant growth in the coming years. Let me put the increase in production from these two single-use programs into the context of our overall view of near-term business growth. Broadly speaking, we think about our business in three operational areas: product development or engineering pipeline, production, and optical components, which is supported by our Ross Optical Division. Our product development business has seen steady growth over the last five years. Since our acquisition of Lighthouse Imaging three years ago, which was done in large part to enhance our product development team, this part of our business has grown organically at an average growth rate of about 25% per year, with record revenue of $8.3 million last year in fiscal 2024. Today, we have 11 programs in our product development pipeline. Two of these are currently transitioning to production, and two to four are expected to enter production in each of the next three years. This is consistent with our business model of using our proprietary technology to develop new products in partnership with our customers and then rolling those products into production where they deliver recurring long-term revenue. In order to support our ability to bring new programs on board, we continue to refine the way we present our unique technology to the market. In the coming weeks, we intend to launch our new platform solution, which will encapsulate much of our technology and a starting platform design that will reduce development risk and time to market for our customers. Initial reaction to this platform solution has been very positive, and we expect this approach to further increase our competitive advantage and presence in the marketplace. We expect product development revenue to be relatively flat in fiscal 2025 as we use some of our engineering resources to complete development work on this platform solution, and as this group supports the transfer to production of a number of programs contributing to significant fiscal 2025 production growth. In the future, we expect this business to grow at annual rates in the 20%-30% range as we continue to hire more engineers and pursue new opportunities. As we've said many times, our product development work leads directly to increases in our production business. This is precisely what's happening today and supporting the bulk of our growth that we anticipate for fiscal 2025. With three programs launching into production in fiscal 2025, we expect strong revenue growth in this part of our business, growing from $6.6 million last year to over $10 million this year. This kind of growth in production presents scaling challenges, but our operations team is already executing, as demonstrated by the significant increases we see from Q1 to Q2. Some of this scaling requires additional production support roles, which we have already filled in anticipation of this production growth. The largest contributor to this growth in production revenue in fiscal 2025 is our single-use cystoscope that I mentioned earlier. Looking forward, with a few programs anticipated to enter production in each of the next three years, each with starting production levels in the $1-$3 million range, we anticipate growth rates of our production revenue will be in the 25%-30% range. Over the last several quarters, we have seen our Ross Optical components business drop and level out due to short-term market forces that we've discussed previously. We anticipate revenue for this division to be flat year over year for this fiscal year, but we have begun to see some signs of market recovery and expect that this recovery, combined with our investments in additional marketing, will help this part of our business achieve annual growth rates of 10%-15% beginning in fiscal 2026. I am extremely excited about where we are today. We are just beginning to see the fruits of our investments we started many years ago to advance our single-use product solutions, and the rest of our business is fitting together to support significant growth over the next few years. Let me now turn it over to Wayne to review the financials in more detail. Wayne? division to be flat year over year for this fiscal year, but we have begun to see some signs of market recovery and expect that this recovery, combined with our investments in additional marketing, will help this part of our business achieve annual growth rates of 10%-15% beginning in fiscal 2026. I am extremely excited about where we are today. We are just beginning to see the fruits of our investments we started many years ago to advance our single-use product solutions, and the rest of our business is fitting together to support significant growth over the next few years. Let me now turn it over to Wayne to review the financials in more detail. Wayne? division to be flat year over year for this fiscal year, but we have begun to see some signs of market recovery and expect that this recovery, combined with our investments in additional marketing, will help this part of our business achieve annual growth rates of 10%-15% beginning in fiscal 2026. I am extremely excited about where we are today. We are just beginning to see the fruits of our investments we started many years ago to advance our single-use product solutions, and the rest of our business is fitting together to support significant growth over the next few years. Let me now turn it over to Wayne to review the financials in more detail. Wayne? division to be flat year over year for this fiscal year, but we have begun to see some signs of market recovery and expect that this recovery, combined with our investments in additional marketing, will help this part of our business achieve annual growth rates of 10%-15% beginning in fiscal 2026. I am extremely excited about where we are today. We are just beginning to see the fruits of our investments we started many years ago to advance our single-use product solutions, and the rest of our business is fitting together to support significant growth over the next few years. Let me now turn it over to Wayne to review the financials in more detail. Wayne? division to be flat year over year for this fiscal year, but we have begun to see some signs of market recovery and expect that this recovery, combined with our investments in additional marketing, will help this part of our business achieve annual growth rates of 10%-15% beginning in fiscal 2026. I am extremely excited about where we are today. We are just beginning to see the fruits of our investments we started many years ago to advance our single-use product solutions, and the rest of our business is fitting together to support significant growth over the next few years. Let me now turn it over to Wayne to review the financials in more detail. Wayne? Thank you, Joe. Let me expand on some of Joe's comments on the financial results, starting with revenue. For the first quarter, revenue was $4.2 million compared to $4.3 million in the first quarter of 2023. This was within the range that we discussed on our last call. For the quarter ending September 30, 2024, gross margins were 27% compared to 34% in the quarter ending September 30, 2023. First quarter revenues were impacted by a manufacturing pause for a defense aerospace customer that was occasioned by a change in specification finalized late in the quarter ending September 30, 2024. Similar to the prior sequential quarter, revenues were also impacted by the direction of certain engineering resources toward the completion of research and development projects and to specifically work around the company's platform offering that is already leading to accelerating interest in our product development offerings. Additionally, as Joe mentioned, we have added to our manufacturing team in anticipation of increasing production revenues. These items and relatively low sales volume work to reduce gross margin. We expect gross margin to recover in the second quarter as manufacturing continues to scale and revenues increase. Operating expenses for the quarter were $2.4 million compared to $1.9 million last year. This increase included increases in R&D of $188,000 for the quarter. With the anticipated rollout of our new platform solution and similar to the prior sequential quarter, we incurred significant internal R&D expenses that were higher compared to earlier quarters, but also represent a strong investment in the platform solution that we believe will have positive sales impact in the near term. Additionally, operating expenses included some one-time recruitment costs and other expense fluctuations, but were otherwise in line with our expectations for the quarter. As a result of the lower revenue, our net loss was $1.3 million for the quarter ending September 30, 2024, compared to a $464,000 net loss last year. Adjusted EBITDA, which excludes stock-based compensation, interest, depreciation, and amortization, was negative $1 million in the first quarter of 2025 compared to negative adjusted EBITDA of $245,000 last year. As we look to achieve our goals for the upcoming year, we expect adjusted EBITDA break-even quarterly revenue levels to be approximately $5.5 million. We believe we will achieve revenue levels of at least $5 million for the second quarter ending December 31, 2024, with continued revenue growth that will move us beyond adjusted EBITDA break-even in the second half of the fiscal year. Our cash balance at September 30, 2024, was $636,000. During the first quarter, in August, we completed a registered direct offering of common stock that netted $1.2 million, which included participation from directors and officers to supplement our working capital. Additionally, we maintained availability on our line of credit of $750,000. As we have mentioned in prior calls, we are evaluating several alternatives that can support our growth in manufacturing and our need to continue to attract high-caliber engineering talent that will be key in our drive to scale and profitability. As we have already noted, we see strong customer retention resulting from how we maintain joint ownership over our intellectual property and participate in our customers' FDA filings. Additionally, our proprietary manufacturing techniques, global partnerships with key suppliers, and the high degree of recurring revenue from single-use medical devices leads us to believe that the long-term prospects of our business are both strong and unique. We are taking action today to expand manufacturing capacity, and are confident the attractiveness of our business model will afford us the ability to attract any needed investment to scale more dramatically in the future. I will now turn the call back over to Joe for some final comments. Thank you, Wayne. Let me finish by summarizing a few key points. First, as we anticipated on our last call, Q1 revenue and EBITDA levels were significantly suppressed due to issues with a few production programs. Second, these production issues have been largely resolved, so we expect significantly higher revenue and dramatic improvements in profitability in Q2 and continued growth over the second half of the fiscal year. Third, and perhaps most importantly, the recent receipt of first production orders for two single-use programs that have been in development for multiple years represents a real milestone for Precision Optics. It validates the many years of investments we have made in this area and confirms our ability to bring these programs to production where they contribute to long-term revenue growth, and finally, our product development pipeline remains robust, with new opportunities coming to us every day to replace those that are transitioning to production. This level of interest in our technology gives us confidence we are truly providing differentiated solutions in the marketplace. All in all, I'm very pleased with the progress we are making and extremely optimistic for future opportunities and growth of our business. To all of you on the call, I thank you for your continued support of Precision Optics. We'd be happy to take questions now. Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we'll pause momentarily to assemble roster. Again, to ask a question, please press star then one. Hey, Chuck, this is Robert. Why don't I jump in while we see if anybody queues up on the teleconference line, and we will take a few webcasted questions that we have here. Guys, I'm going to try to put these maybe in a couple of different buckets if I can. Talking about the first single-use program there, I think you talked about this a little bit, but what type of visibility will you have to orders against the initial $9 million order for next year? Sort of as a follow-up here, when might you see a follow-on order? Is there a sort of rolling target that they are looking to have? Yeah, sure. So we've provided a little bit of information about this in our press releases, and we commented in the comments today. Of that $9 million, we expect about $3.6 million to be delivered in this fiscal year. That number increases a bit for fiscal 2026, and then it finishes out sometime in fiscal 2027. I will say that with the initial launch, our customer has been pulling things in a bit, so I think there's a chance that it will complete deliveries sooner, which, of course, is a good thing for us. All in all, I would expect that towards the middle or end of fiscal 2026, we would start to see indications of what a follow-on might look like for fiscal 2027. I'll also comment that as we finish this order, I expect we'll get into a more natural and regular routine of getting updates on our customers' forecasts every quarter and then following with quarterly purchase orders. There's some fairly detailed approach that we've agreed to take with our customer on rolling forecasts and such. In terms of the level they expect to get to, for this particular customer, they are looking at the market growing quite substantially. They've shared with us their view of the market, and it's clear that there is plenty of addressable market for them to grow quite substantially, which is why we've commented on the fact that we believe this order in particular could grow several-fold over the next couple of years. Okay, great. Question here on the announcement from today, sort of the second program. Again, it's basically sort of a similar question. What sort of visibility do you have here and cadence for sort of order flows into the future? Yeah, sure. So again, as we commented in the press release and in the comments today, this initial order for about $350,000 is really just, but it's a smaller order because it's a stocking order to fill their inventory so they're prepared for full launch in June. They'll have a more limited launch, I think, in April or May, and then they'll have the full launch in June. We've already been talking with this customer about a follow-on order to support their first year after launch. And as I said in my comments, we expect that that'll be at a higher delivery rate. If you do all the math, it'll be somewhere around $1.5 million. It could be a little less, a little more, I think, for that first year of their launch, which happens to line up with our fiscal 2026. This customer, as well, is looking at growing their market, and we expect that the numbers would increase from there. This customer has also talked with us about the possibility of transferring the production to their own facility. If folks go back and look at some of our earlier press releases and comments on these things, you'll remember that we negotiated an arrangement here with both of these customers, but particularly with this one that we just announced today, where either we will manufacture the product or we'll be paid a royalty. In either case, we end up with similar bottom-line EBITDA numbers, so we're comfortable moving in either direction, and so with this customer, I think there's a fair chance that after that first year of production, it may move to one of their facilities. Of course, there's a lot that's going to happen in the next year, year and a half, so we'll see. Maybe we'll continue producing it. Either way, we and they expect that their orders will go up from that $1.5 million rate or the comparable royalties will go up as they absorb more market share beyond their first year of launch. Okay, great. Sort of staying on the topic here of single-use, you mentioned other single-use programs in the pipeline. Can you quantify further and any insights into timelines for advancement to production? Yeah, sure. So right now, we have two programs that are formally in the pipeline, meaning we've been working on their designs for some time now. We have two or three additional programs where we've done some sort of limited proof of concept prototypes with these other customers there. We're working with them now to define the exact characteristics of the scope that they may be looking for. So there are two that are sort of moving forward full speed ahead and two or three that we expect to get into the pipeline in the next few months. Of the two that are already in production, it's always difficult to predict timing accurately because, of course, you have to go through prototypes and they have sometimes some testing and they have to get FDA approval. But one of these two we expect will go into production in the next 12 months. They're pretty far along now. The second one will likely take another year or two before that one goes into production. In general, with new programs that come in, the cystoscopy single-use program that's associated with the $9 million order that we announced in May, that one we actually went through the development process in only two years. It was a very, very aggressive program. The customer was highly motivated, so that's sort of on the short side, the amount of time that it takes for new programs coming in. The program that we announced the production order for today, I think I mentioned in my remarks, took over five years, but they were sort of an early adopter because they were our first single-use program, so generally speaking, we would expect that new programs would take somewhere between two and three years to get into production, so to summarize, we have one other one. We have two that are going into production now. We have another one that will likely go into production in 12 months. Another one after that that'll go into production in 12-24 or 30 months, and then three or four more that will come online after that. Okay, great. Next question here. Are single-use programs theoretically larger than the $1 million minimum run rate you desire for advancement? If so, are you prioritizing single-use opportunities versus more conventionally internally in how you staff your engineers? Yeah. So let's see. There's two parts to that. The first part is the size of the typical production order. It is true that typically the single-use programs will start above the $1 million-dollar range. So you're right. Our typical goal here is to have products go into production in the $1-$3 million dollar range. Typically, single-use programs will start at quantities of 10,000 units a year or higher. Sometimes it takes a little while to run up to that, but that's basically where you get the economies of scale that make single-use meaningful. And then the typical average selling price on the very low side is about $100 a unit. On the high side, around $300 a unit. So starting quantities of 10,000 units and pricing of $100-$300 would put you in that $1 million-$3 million dollar range. I would say that it really depends on the customer, but I think there's better than a 50/50 chance that typical single-use programs will start at a rate that's higher than that $1 million, closer to the $2 million or $3 million dollar range. In terms of how we prioritize the programs in the product development pipeline, it really depends on a number of factors. Certainly, the revenue that we expect in the production side of things when it gets to production is one of the variables that we consider. We also consider pretty heavily how quickly we can get it to production because whenever we can get a product transitioned from the product development pipeline into production, it becomes a long-term revenue generator, and it opens up a slot in our product development pipeline to bring new programs in. The third part that we look at carefully is the timeline of our customer, of course. We don't have complete control over the timelines, nor does our customer in all cases because there is this FDA certification or approval that always has to happen as well, and that can limit the timeline as well. So we really look at a set of variables, and certainly the size of the revenue potential when it gets to production is one of those variables that we look at. Okay, great. Maybe transitioning topics here a little bit. Engineering. Engineering has been relatively flat the last few quarters. Are there opportunities to regrow the base? And I know you touched a little bit on it, but let's make sure we have their question addressed here. Yeah, sure. So you're right. We did comment a little bit on that. So there are a couple of things happening here with the engineering team, with the product development team. So the first thing is they've been growing pretty substantially over the last couple of years since we acquired Lighthouse, even while we were doing the integration of Lighthouse into POC. So they've done a great job at continuing to move forward a number of programs, in particular these two that were just launched into production, these two single-use programs. The last couple of quarters, a few things have been happening. The first thing is we have found a new facility for this group, and they've been running pretty fast with the systems that we had in place. We are updating the facility of the group in Maine. We're also updating the tools that they have to work with because they will become more efficient. All of that is difficult to do while you're growing at a 25% year-over-year growth rate. We're giving them a little bit of space to update their tools in order to be able to grow beyond where they are now. At the same time, as we mentioned a couple of times, we have been using some of those resources to support our Platform Solution product, which we'll be launching in the upcoming weeks. That has taken a fair amount of internal R&D, and so that hasn't shown up as revenue, even though the team has been working every bit as hard as they were a few quarters ago. So those things are all happening now. I think that they'll be wrapped up in the next couple of quarters. So I would expect starting again in fiscal 2026, we'll start to see some fairly significant growth. We continue to hire new engineers when we can find them. The engineering talent that fits with the product development work that we do is hard to find, but we're successful. And when we find a candidate, they generally like to come work with us because we have a good reputation. So we'll continue growing the team, and I think we'll continue to see pretty steady revenue levels this fiscal year, and then we'll start to see some significant growth as we come out of the fourth quarter and into fiscal 2026. Okay, great. Let me remind everyone, again, if you're on the teleconference line and you would like to ask a question, you can press star and then one. And again, if you're listening through the webcast, you can type your question in the ask a question box. Looks like maybe just a couple more here, Joe. Can you help people understand the fixed versus variable expenses on COGS and how incremental revenue flows through to the bottom line? I'm going to let Wayne answer that one. Yeah. So as you expect, with lower revenues and a relatively fixed cost of sales, when we have a revenue decrease, it does impact the margins quite substantially. On the way when revenues increase, what we will see as a variable cost would be primarily materials and then some labor, but we staff our direct labor as a line. So when revenues decrease, we can't exactly turn that line up, if you will, or turn that line down. So there's more of a penalty going down in revenues, obviously, than going up. I think the pieces of margin are very different when you look at the different business components of the business. So for instance, for Ross Optical, we could grow that business quite substantially without adding any headcount because really the only variable costs there are really logistics and materials. On the engineering side, margin's impacted by the mix of materials, which has a lower margin versus the labor components. So that can be quite a bit of a variability in any particular quarter. All right. Great. Thanks, Wayne. Looks like maybe one more question here. Given the company's leading position in 3D endoscopes and single-use technologies, does management expect Intuitive Surgical to be a potential customer as they would need access for integration? And can you maybe just talk a bit? And I know there's a history here, so maybe you can expand upon that for the investor. Yeah, sure. We're quite proud of the fact that POC is the company that designed the very first 3D endoscope for Intuitive Surgical way back in the late 1990s. And we have been engaged with Intuitive Surgical many times over those last 20 years. We entered into an agreement about, boy, 15 or 17 years ago that was a sale of technology of some of our patent portfolio at the time. That was m any years ago now. But we have a good relationship with Intuitive Surgical. I can't comment, obviously, on things that we're doing currently, but certainly the kinds of technologies that we're developing are in line with the kinds of things that not only Intuitive, but really many of the robotic systems, robotic companies that are out there today that have grown quite substantially may be looking for. I will just add that Intuitive Surgical now has acquired a big division of Schölly. That happened a couple of years ago. So they do have their own internal optical engineering and manufacturing capability. So I wouldn't say that Intuitive is without their own optical capabilities, but we do have some unique things, and I think that the technologies that we've developed, as the question implies, both in single-use and in 3D endoscopy, can have broad applications throughout the robotic endoscopy world. All right. Great. Well, Joe, it looks like I'm not seeing any further questions online or in the teleconference queue. So with that, I will turn it back over to you for closing remarks. Okay. Thank you, Robert, and thank you, everyone, for joining us on the call today. I look forward to speaking to everyone soon. Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.