Greetings, welcome to the Vuzix second quarter, ending June 30th, 2023 financial results and business update conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the call, please press star zero on your telephone keypad. As a reminder, this call is being recorded. Now, I would like to turn the call over to Ed McGregor, Director of Investor Relations at Vuzix. Mr. McGregor, you may begin. Thank you, operator, and good afternoon, everyone. Welcome to the Vuzix second quarter and 2023 ending June 30th, financial results and business update conference call. With us today are Vuzix CEO, Paul Travers, and our CFO, Grant Russell. Before I turn the call over to Paul, I'd like to remind you that on this call, management's prepared remarks may contain forward-looking statements, which are subject to risks and uncertainties, and management may make additional forward-looking statements during the question and answer session. Therefore, the company claims the protection of the safe harbor for forward-looking statements that are contained in the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those contemplated by any forward-looking statements as a result of certain factors, including, but not limited to, general economic and business conditions, competitive factors, changes in business strategy or development plans, the ability to attract and retain qualified personnel, as well as changes in legal and regulatory requirements. In addition, any projections as to the company's future performance represent management's estimates as of today, August 8th, 2023. Vuzix assumes no obligation to update these projections in the future as market conditions change. This afternoon, the company issued a press release announcing its second quarter 2023 financial results and filed its 10-Q with the SEC. Participants on this call who may not have already done so, may wish to look at those documents, as the company will provide a summary of the results discussed on today's call. Today's call may include certain non-GAAP financial measures. When required, reconciliation to the most directly comparable financial measures calculated and presented in accordance with GAAP can be found on the company's Form 10-K annual filing at SEC.gov, which is also available at www.vuzix.com. I'll now turn the call over to Vuzix CEO, Paul Travers, who will give an overview of the company's operating results and business outlook. Paul will then turn the call over to Grant Russell, Vuzix CFO, who will provide an overview of the company's second quarter financial results. Paul will then return to make some closing remarks, after which we'll move on to the Q&A session. Paul? Thank you, Ed. Hello, everyone, and welcome to the Vuzix Q2 2023 conference call. On this call, we are going to review our operating results and recent developments and then give you some perspective on where we see things headed in the second half of 2023. Our Q2 revenue was $4.7 million, representing an increase of 56% compared to the previous year and up 12% sequentially from the prior quarter. Product sales, driven by our smart glasses, was a record $4.4 million, representing an increase of 53% compared to the previous year. During Q2, we recognized OEM revenue of $0.3 million related to the delivery of optical components and waveguides. At the same time, the number of engagements, which should ultimately result in significant business going forward for Vuzix, has been expanding at an amazing pace. As you can see, 2023 is off to a strong start, with first half revenue up 61% over the first half of 2022. As we enter the back half of 2023, we remain bullish on our full year prospects and believe we are well positioned to achieve continued overall record revenues for the full year. I'd like to get into some details on what we are seeing on our various business areas. Vuzix smart glasses are being called upon to enhance productivity across markets in a multitude of environments and configurations. We are witnessing underlying smart glasses industry growth as companies get more engaged and focused on solving long-term operational challenges and improving productivity with smart glasses-based solutions. This is occurring in most of our markets, including warehousing and logistics, healthcare, remote support, and Industry 4.0 in general. The progressing trends towards broader enterprise-wide rollouts from key Fortune 100 accounts is exciting for Vuzix in the enterprise smart glasses industry in general. Vuzix has numerous existing accounts that are expected to continue their rollout plans for smart glasses in an expanded way over the second half of this year, especially in warehousing and logistics. These early adopter accounts represent a core of business that understands and is adopting wearable technology for the proven ROIs and productivity KPIs that the technology affords. At the same time, we're targeting more value-added channel partners that have established ecosystems of integrators, ISVs, and larger end customers. During the second quarter, we successfully continued to expand our global sales channels with a focus on solution selling and enablement to deliver better service and support to the end customer. Expanding our global channel is obviously important for our long-term growth as it allows Vuzix to effectively multiply our sales team with minimal investment in core regions across the globe with world-class partners. ASK Corporation, headquartered in Tokyo, is one such value-added channel partner joining Vuzix during the second quarter. ASK Corporation provides products, services, and solutions to enterprise computing, consumer, commercial, and professional users across a variety of industries, from healthcare to automotive, effectively creating a significant increase to Vuzix sales, service, and support infrastructure in the Asian region. There is little doubt that the use of hands-free augmented reality solutions in enterprise, medical, defense, and ultimately by consumers, is the wave of the future. At the same time, companies are aligning their future strategies around AI-enabled smart glasses. The expected ubiquitous use of AI in areas such as education, e-commerce, healthcare, communications, defense, security, and more, you can see that AI is everywhere, will fit hand to glove with AR smart glasses. AI-enabled smart glasses, we feel, are going to significantly enhance human capabilities in many ways. Examples include visual search, language translation, voice control, on-the-fly fact-checking, hearing-impaired solutions, sign language smart glasses, human enhancement in the workforce with applications from visual picking to pallet packing. The list goes on and on, and we are just getting started. This marriage of technologies should accelerate the need and use cases for lightweight, wearable AR smart glasses. We're already starting to see AR smart glasses with AI-based applications and use cases gaining traction in both the business and consumer markets. On the OEM products and engineering services front, Vuzix has a growing list of opportunities in the queue with new and existing customers. Vuzix is starting to get recognized by the market as both a U.S.-based OEM and OEM supplier, as companies are turning towards Vuzix to not only potentially supply waveguides and optical components, but also complete product designs for wearables. Over the last year, Vuzix began to ramp up our efforts around our OEM design and manufacturing group to streamline our efforts to respond to requests for quotes for our waveguide-based solutions. In many cases, customers are also looking at display engines to drive images into the waveguides. We have been investing in new equipment and enhanced production processes. The expansion of our waveguide manufacturing into a new separate facility with significantly increased capacity to support waveguide-related production needs for Vuzix and our third-party OEM customers will allow us to build more waveguides faster and less expensively. To be clear, we are already in production of waveguides, and in parallel, this fall, Vuzix will open its one-of-a-kind waveguide mega factory that is dedicated to the production of waveguides in volumes, ultimately in the millions of units annually. The flexibility of our new technology and waveguide design capabilities now allows Vuzix to spin a full custom design in as little as three to four months, while other companies can take 18 months for a new design, if they will even do it. Others can only offer a one-size-fits-all solution, which is not suitable for most OEMs, particularly those intending to enter the broader consumer markets. Additionally, the few waveguide competitors we do have are not domestic and tend to use expensive semiconductor equipment that results in lower volume capacity and non-competitive cost structures. We are fielding new interest to develop with the ultimate goal of producing waveguide-based solutions for the defense, commercial aviation, enterprise, and even the broader AR consumer markets. Within each of these markets, we see significant opportunities that can leverage our know-how and core technology that have been developed over the last 25+ years at Vuzix. The defense head-mounted display or head-up display markets today consists mainly of night vision devices and head-mounted information displays. Waveguides and display engines are needed for all kinds of applications around information access in the field and are becoming critical. Whether it is in the form of AR computing or advanced see-through night vision systems, access to the right information at the right time generally wins the day. The head-mounted display portion of the defense market is just getting started, but is expected to grow significantly as new technology offerings are designed in and adopted over time. In defense, Vuzix has major customers that have been or are developing our waveguides into their head-mounted programs. Some are designing full custom waveguides and display engines, while others will employ our standard waveguide and display engine offerings. We continue to anticipate several of these defense accounts to move from R&D projects and begin scaled production by the end of this year and going into the first half of 2024. On the waveguide front, we have made some recent advancements that can allow us to manufacture large format waveguides that are many times bigger than that needed for AR glasses and head-mounted displays. The ability to produce large format waveguides should open up new markets for large format heads-up displays that are required for use in conventional vehicles to aircraft cockpits, just like the heads-up display in the windshield of a luxury car. Specifically, the aviation industry is a market that already has incumbent HUD solutions in the cockpit, both in the defense and commercial markets. Our waveguides and microLED display engines, taken together, can offer a significant reduction in the needed space and cost to implement the heads-up display within the precious little physical space available inside most aircraft. We have received serious interest and look forward to providing further details as new programs are expected to get started soon. While the consumer AR market is still in its infancy in terms of volume, billions of dollars are being poured into R&D by major tech companies trying to solve the challenges required to miniaturize the technology for the needed fashion-forward designs that people would actually wear. The race for them to secure the supply chain and key components to bring fashion-forward smart glasses to market is well underway. We continue to receive strong interest from a diverse group of companies, including fashion brands, telecoms, social media firms, sports and gaming, and we look forward to providing further details once their new programs get started with Vuzix. Similar to the adoption curve offered by the modern-day smartphone, the expectation is that the consumer AR market will rapidly develop and ultimately become a multi-billion unit market. The Ultralite AR platform, announced earlier this year, utilizes the latest microLED engines and waveguides from Vuzix and is packaged into a form factor that we feel will finally appeal to the broader markets. We have been meeting with many potential customers across the globe, where we showcased our Ultralite platform. The interest abroad, as well as domestically, from ODM and OEM solutions from Vuzix around our waveguides and Ultralite platform is strong. Vuzix Ultralite platform-based solutions will be in production by the end of this year, and we expect will be going to market with several OEM brands through 2024. The Vuzix patent portfolio currently includes 329 patents and patents pending, an impressive 50% increase over the last 24 months. This breaks down to 178 issued patents and 151 pending applications in a variety of geographic areas. Our portfolio covers a broad range of technologies and includes a significant collection of fundamental waveguide design, patents, and applications. We have a combination of both patents and trade secrets regarding nano imprinting, process equipment, and materials like polymers, adhesion promoters, and release agents that are critical to how we can produce in volume and at low cost. Bottom line: we feel Vuzix has a strong intellectual property position in many of the critical areas of AR smart glasses. The soon-to-be fully operational waveguide mega factory is dedicated to the production of waveguides in volume. We believe it is one of a kind in the world today. The new facility will focus on the advancement of higher index materials, advanced glass substrates, and unique formulation technologies. The required power infrastructure has been installed and turned on at the factory, and waveguide production equipment is being moved in and qualified. We expect the new facility to be operational in the fall of this year. This new facility provides an additional 12,000 sq ft of manufacturing space adjacent to our existing plant, with an optional 27,000 sq ft to grow into. The new facility is designed to support our latest waveguide technologies, increase our unit capacity significantly, and lower the unit volume manufacturing cost of our waveguides. Our ability to design and fabricate waveguides in high volume and at low cost, we believe, should be second to none. Ultimately, both lower unit cost and the ability to manufacture in volume are two critical requirements to overcome to support the needs for a broad AR smart glasses market, and Vuzix is positioned to get it done. From specification to design, to mold production, to replication, to test and system integration, we do it all in-house in our New York facility. We can customize a ground-up system based on specifications, offer a reference design, or provide design parameters so we can build to print based on a customer's own unique waveguide layout. We can make them small or large. We can turn the design around quickly, and our expertise and capabilities in this area are unmatched. Waveguides and ultimately microLED displays are essential components for lightweight AR smart glasses and other wearables. We believe our increased capacity, lower cost waveguide offering, and our ongoing investments in next-generation microLED displays will fortify Vuzix's position to play a critical role in an industry that should ultimately represent many billions of dollars of revenues annually. As a reminder, the ability to produce RGB microLEDs on a single substrate that still have high-efficiency color remains elusive. However, there have been varying degrees of success to date by some microLED manufacturers with single-color displays, but just barely to an acceptable level, and no one is shipping anything that's full color in an operational range yet. Because microLEDs are so strategic and fit hand to glove with the optical waveguides, we feel it is critical to attempt to secure the supply of cost-effective, high-volume fabrication of these devices. To that end, we have fortified our microLED efforts by establishing working relationships with several of the most advanced vendors in this space through both partnerships and investments, many of which we will not publicize for competitive reasons. Of course, the highest profile development in this area is the technology license and development agreements we signed with Atomistic roughly one year ago. While we have been short on specifics to date, I can say that Atomistic, with its very novel approach, is making great progress. The microLED design process takes time, and portions of the fabrication process will use very complex and customized equipment that had to be designed from the ground up. We will have more to share with you as this all unfolds, but suffice to say, Atomistic's technology has great potential to create incredibly advanced, full-color, high-efficiency microLED displays. Displays that have the potential to upend the entire smart glasses industry, quite frankly, the display industry in general, with very compact, full color, exceptional brightness, and all-day battery performance to be incorporated in a fashion-forward smart glasses form factor that everyone will wear. To recap, we feel that Vuzix is one of the outstanding leaders in the AR industry today, it is evident in multiple areas. Our business is seeing expanded growth on the top line. Vuzix is one of the fastest growing enterprise product solutions in the market. Vuzix has critical waveguide technology from design to a one-of-a-kind mega factory for high volume production at broad market-enabling price points. Vuzix has a major stake in what should prove to be the most advanced microLED display technology available, solving for the critically needed, high efficiency, full color displays for the ultimate AR glasses solution of the future. Bottom line, we feel we are positioned well to win and see significant growth in our enterprise value going forward, especially considering we believe we are a company that is cornerstone to a market that is touted by industry experts to ultimately be greater than a $1 trillion plus within a decade. I'd like to now pass the call over to Grant for his financial review. Grant? Thanks, Paul. As Ed mentioned, the 10-Q we filed this afternoon with the SEC offers a detailed explanation of our quarterly financials, so I'm just going to provide you with a bit of color on some of the numbers now. Our second quarter total revenues for the three months ended June 30th, 2023, was $4.7 million, as compared to $3 million for the prior 2022 period, an overall increase of 56%. The revenue increase was primarily the result of higher M400 product sales, which increased 53% year-over-year. Sales of engineering services for the three months ended June 30th, 2023, was $0.3 million, as compared to $0.1 million for the same 2022 quarterly period. We currently have remaining performance obligations of approximately $0.1 million on a current waveguide development project, and we anticipate starting a new OEM projects with customers in Q3 of 2023. There was an overall gross profit of $1 million, or 21%, for the three months ended June 30th, 2023, as compared to a gross profit of $0.3 million, or 9%, for the same period in 2022. The improvement was due to our increased sales, which enabled greater absorption of our relatively fixed manufacturing and overhead costs. Research and development expense was $2.8 million for the three months ended June 30th, 2023, versus $3 million for the comparable 2022 period, a decrease of approximately 5%. The decrease was largely due to a reduction in external development expenses and consultants related to new products. Selling and marketing expense was $2.5 million for the three months ended June 30th, 2023, versus $1.9 million for the comparable 2022 period, an increase of approximately 36%. This increase was primarily due to higher salary and benefit expenses associated with increased headcount as compared to the previous year's period. General and administrative expense for the three months ended June 30th, 2023, was $4.3 million versus $5 million for the comparable 2022 period, a decrease of approximately 15%. The decline was primarily due to a decrease in non-cash stock-based compensation expense. Depreciation and amortization expense increased to $1 million for the three months ended June 30th, 2023, versus $0.4 million in the prior year's period. The bulk of the increase was due to the amortization of the technology license with Atomistic, which only began midway through Q2 of 2022. The net loss for the three months ended June 30th, 2023, was $9.4 million, or $0.14 a share, versus a net loss of $10 million or $0.16 per share for the same period in 2022. For some balance sheet highlights. Our balance sheet remains strong, with cash and cash equivalents of $48.6 million as of June 30th, 2023, and a net working capital position of $61.5 million. The overall net cash flows used in operating activities after the net changes in operating assets and liabilities was $7.9 million for Q2 2023, versus $4.6 million in the comparable 2022 period. The bulk of this increase was due to a $3.4 million increase in accounts receivable in the quarter. Excluding non-cash items and changes in working capital, our cash burn from operations, a non-GAAP measure for the second quarter of 2023, was $4.8 million versus $5.5 million in the prior year's period. Cash used for investing activities for the second quarter of 2023 was $6.8 million, as compared to $8.2 million in the prior year's period, with the bulk of these investments being a $6 million payment toward our Atomistic technology licensing fee commitments. As of June 30th, the company continues to have no current or long-term debt obligations outstanding, other than the currently outstanding licensing fee commitments to Atomistic of $3.5 million, which will be fully paid during the second half of 2023. Looking forward to the balance of 2023 and 2024, we are confident we have the resources to execute on our growth business plan and further invest in our future. I would like to make a few comments in this regard. Firstly, our total cash usages over the past year included ongoing investments in equipment and our new waveguide production facility, as well as significant payments related to the Atomistic technology licensing fee commitment. These expenditures will be significantly less in the second half of 2023. Looking forward to 2024, we expect to see continued moderated investment levels, but perhaps further increases in our working capital investments as our business continues its strong growth trajectory. With that, I would like to turn the call back over to Paul. Thanks, Grant. As our revenues continue to grow, our line of sight to achieving profitable operations gets nearer. We expect the pace of our growth in the coming months and quarters will continue, and with our shift more to third-party channel partners and resellers in our smart glasses segment, this will slow the growth in our sales and marketing costs, which have grown the fastest of all our cash operating costs. Of course, we will be looking at further ways across the company to reduce costs and improve productivity so we can bring as much income as possible to our bottom line. It is a focused effort for Vuzix, and as Grant just said, we have all the resources we need to execute our plans going forward. With that, I would like to now turn the call back over to the operator for Q&A. Thank you. Ladies and gentlemen, at this time, we will conduct our question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from Matt VanVliet with BTIG. Please state your question. Hey, good afternoon, guys. Thanks for taking my question. I guess first on, the smart glasses unit volume growth, especially on the M400 side, I wonder if you could just, you know, give a little bit more detail in terms of what, what market verticals you're seeing the most success in that's really driving, those rates. In terms of, either orders already in or orders expected for the second half, you know, what, what market verticals do you think will drive performance in the second half as well? Yeah. Hey, Matt. Thanks for the question. The, the interesting thing about our smart glasses products, right, it's a wearable computer, and there's a lot of places that it can be used. There are, however, several places that seem to be leading the pace here at Vuzix. I'm sure everybody has seen how much the medical community are embracing our glasses these days. That's definitely an area where we see growth happening. Same time, the supply chain with warehouse picking and packing, and there's just a plethora of areas where moving boxes around with hands-free ability to pick is important. That's another accelerating piece of the business, and it's across multiple accounts on both of those areas. Finally, general, remote support is a big deal, right? In, in fact, it's even green. I was in Japan, two weeks, three weeks ago at an ESG conference, speaking there, and there were four or five companies that gave presentations, and it was all about how smart glasses can be used for the environmental kinds of and social side of things at the, at the same time, quite frankly. The whole idea of remote support, saving money, not putting people on airplanes and the like. It's, it's across those, and some of the areas are from automotive to manufacturing, and of course, we've all, you know, heard about guys like Amazon and the like. It's pretty broad-based, Matt. It's not just any given one. Of some of those, though, they're we really expect to see some significant uptick over the next six months, plus, because some of these guys are, they're no longer in POCs, they're actually rolling out. Okay, very helpful. Then on the OEM side, I guess, what are the metrics that we should be looking for, or the announcements for orders that might convince you to continue to take the extra space available to you on the new manufacturing facility? Sort of layered within that question, you know, what are the additional costs that we should assume that eventually kind of layer in on top of, maybe what the current costs are today? First, let me give you a feel for what's possible out of the 12,000 sq ft that we already have in place. This is a Class 1000 and better clean room facility that was put in specifically to manufacture in volume for us. This facility, just by itself, will get us over 1 million waveguides on an annual basis. In fact, working multiple shifts, it could be a few integers more than that, so one, two kinds of numbers. Now, if you look at the makeup of the product flow and what markets they would go in, some of these markets are defense-related, and you might sell a waveguide solution with an engine for somewhere between $3,000-$7,500 a piece. Some of those guys have, you know, volumes like 20,000-40,000 kinds of annual numbers. There's a significant amount of revenue that should be high margin that will come out of that facility, and that's only a small piece of the overall kinds of volume that we can produce out of this thing. The broader markets, on the other hand, are going to need much higher volumes. Admittedly, what comes with those higher volumes is the price points will need to come down. We still will garner significant margin, we believe, out of those higher volume opportunities. Right now, for the next year plus, I would suggest we're in pretty darn good shape just with what we have. That said, we can 3x our capacity from where we are right now in the same building, when we need to move into the rest of it. The numbers, you can add them up pretty easily if you just, you know, make a little spreadsheet there and look at the plans and look at those kinds of numbers, and you can see that it's in the many, many millions of revenues on an annual basis. You should not see from Vuzix the need to expand beyond where we're at in this footprint that we have today. Grant can talk to this a bit more, but there, there's just a little bit more that we're, we're kind of cleaning up by the end of this year. Generally speaking, you're not going to see the level of CapEx and expenditures that we've had to put in to get the plant floor to where it's at. Matt, Grant here, the incremental expense we're looking at for our Becker, Becker Road waveguide plant is around $60,000 a month. You know, we forecast for the, you know, the next six to 12 months. Clearly, if, you know, if the, you know, the business is there and we, we got to run multiple shifts, like, you know, that'll go up. That's really covering our fixed costs of the new plant and a bit of, you know, supervision. The existing waveguides are being moved out of our existing plant across integrated into that. There'll be some economies, but it's not going to be significant. Okay. Very helpful. Thank you. Our next question comes from Tyler Burmeister with Craig-Hallum Capital. Please state your question. Hey, guys. Thanks for letting us ask a couple questions. I guess first, Paul, you know, sounded, you know, excited about the opportunities we have going in the, the back half of the year. You know, with your pipeline and visibility there, I guess, you know, would you be comfortable expecting to see continued sequential growth through the back, back half of the year? It sure looks that way, Tyler. Yes. Perfect. Thank you. It's a strong pipeline of business. In fact, it's exciting to see just in our standard product side, but I will also say that you should see a nice uptick in the engineering and NRE side of the OEM business. The OEM business is kind of interesting today in that there's so many companies coming now that really like our Ultralite platform, that they're buying our standard waveguides out of that platform and our engines out of that platform and looking at developing them. For them to get started, the engineering fees are less. That said, there's some other programs that definitely will be significant that also will be coming on board. Knock on wood, I mean, we're literally in the throes of final agreements here, so you should see the OEM kick in also in the back half. That's perfect, and, and leads into my, my next question, too, and kind of a follow-up on that. Talk a little bit more about the OEM opportunities. You know, optimistic about, you know, at least these- at least multiple or I think you said multiple opportunities that are going to begin ramping in the second half and into next year. You know, are, are these the type of defense contract opportunities that you just stated could be, you know, multiple thousands of dollars, ASPs with, you know, potential for tens of thousands of units over time? You know, if that's over time, you know, what, what, what should we expect, you know, kind of initial order next year, hundreds of units, still potentially thousands of units? Any, any help maybe framing that would be, would be great. First of all, it's not just defense going into next year, I believe. In 2024, you will see pretty broad-based mix of customers in the OEM side of our business. Excuse me. Maybe some flavor for that, some telecom, some fashion brands, you know, those kinds of things. The defense side of the business, on the defense side of the business, these things are like pulling teeth on time. They take a long time to finally get right and to roll in production. We've talked about this with many, well, several accounts that have been so darn close, and that continues to be the case. We're pretty confident that by the end of this year, going into next year, at the latest, the early part of it, we'll have at least one defense customer that's going into production, and we'll... Their, their price points are in the, you know, the $5,000-$7,000 kinds of, of, costs. Excuse me, not costs, sale price. We expect that to roll next year, and it should be in the hundreds of units, kinds of things. The whole year would add up to maybe 1,000+ kinds of numbers, and you should see the engineering services side of it going up because there's literally a pile of accounts that we have working relationships with. Some of them have many of them have already bought, and others of them are saying, "Look, now that we got this, we want to customize it. Please, can you do it like this?" We're quoting on those kinds of things. It's a pretty broad-based piece of business. Tyler, you could imagine that with the size of it, and I'm not trying to be disparaging on our standard products business, I'm super excited there, too. This thing, I've said it before, could be the tail wagging the dog. The OEM side of our business could end up being very, very significant. Sorry, that's a lot to knock, knock on. Sorry. No, I, I appreciate the color and putting some parameters on that. Maybe just last, last question, pivoting a little bit, you know, highlight your strong patent portfolio continues to grow. You know, obviously, besides protecting your IP, protecting your, you know, developed products that you're selling, you know, any thoughts or updates to, you know, try to monetize those through licensing or, you know, some sort of, you know, IP partnership like that? any color there would be, would be interesting. Thanks. We, we really don't want to take our intellectual properties and put them in a box and go license them out. That said, the transactions on the OEM side of our business come with effectively a license to the intellectual properties that are needed to put our products into the marketplace under the brand names of these other companies. In a way, there's a portion of the sale price that comes with that. What we're not doing, and there's some people that have asked, but the last thing we're interested in doing right now is setting somebody up where we get $1 a unit for a license fee. Perfect. That makes, that makes perfect sense. That's all for us. Thanks, guys. You bet. Our next question comes from Jack Vander Aarde with Maxim Group. Please state your question. Great. Hey, guys, I appreciate the update. Thanks for taking my questions. Hey, Paul, I guess I'll start with just a question on how you expect, maybe as you look forward and more production starts ramping up, how do you expect your overall revenue mix to kind of look in 2024, 2025, maybe in terms of defense, enterprise and consumer? You know, right now you can see that excuse me, it's enterprise-based. M400 is leading the charge for Vuzix, and through the end of this year, I would. Well, right now it's like 90%, I believe. I, I don't know the exact number, but it's 90%+. That is all enterprise-based. I think you'll see in the back half of this year, the OEM side of our business start to move the, move the other way. It'll, it'll grow to maybe as much as 20% in the back half. I don't know. I, I hate to throw out numbers like that because it's hard to tell where it might really end up. I will tell you, though, from a booked business perspective, there's a fair amount of it that we should see here in the back half of this year. When some of these programs on the OEM side kick in, and it takes time, unfortunately, it's hard to gauge exactly when, but I believe you'll start to see the OEM catch up to our growing enterprise business next year. You'll see enterprise continue the lift. You'll see more and more places that are deploying. Our channel partners are doing a great job of helping us to expand our business. Then you'll also see more and more OEM customers come on board. I wish I could give you, Jack, a great... Well, this is where we see it all adding up right now. I can only tell you there is a nice pile of customers that are in our pipeline on the OEM side of business. These are not customers that talk about making, you know, five or 10,000 pieces on an annual basis. It doesn't work for them. That's not business for them. It should represent a significant growth area for Vuzix. I wish I could tell you a more hard data point just yet. I think we'll see more and more as this year and going into next year unfolds. Great. No, I appreciate the color. I have two more. Just kind of on that same topic, just trying to understand or if you can help remind us how Vuzix's going to market or plans to go to market overall in terms of the consumer vertical. Is it going to be under the Vuzix brand, in addition to designing frames for other brands? Just can you provide maybe a high overview of all the different approaches on the consumer vertical? Thanks. It's more like the ODM/OEM model, where these guys come to us, we supply key components and/or white labeled solutions. Some of these companies coming to us don't even have an engineering team. They're more, you know, companies that know how to move product in the marketplace. In those cases, no engineering team, they want as much done by Vuzix as we can possibly do. Excuse me. Some of these guys have no optics team, so they need the optics engines. They have other stuff. If you looked at this waveguide space, any company that's making waveguides today has put hundreds, if not billions of dollars into trying to figure out how to make waveguides. We bring that to the table for a lot of companies. What we don't want to do is compete with those guys. Quite frankly, I've been in this business for a long time. When you're in retail and you fill Best Buy with a bunch of products, and after Christmas hits and you get it all back, that's a train wreck. We don't Vuzix doesn't want to be there. We don't need to be there. We've got the secret sauce to enable other partners to move these products into the marketplace, we plan on having those kinds of relationships in the broader consumer marketplace. In the, in the enterprise side, you will see a continued flow of products that are sexy, fashion-forward, ruggedized for the enterprise space, but in the broader markets, you're going to see partnerships and OEM relationships, not Vuzix branded. Got it. That makes, that makes a lot of sense. I'm, I'm appreciate the, the reiteration of, color there. Maybe just one more from me, more maybe for Grant. On the gross margin front, just kind of what are normalized levels from your view on both the product and engineering services gross margins? Do you see an uptick in gross margin going forward for both revenue streams, and why is that? Thanks. Well, our, our goal is, is clearly to, to get as close to 40% as possible. I mean, right now, you know, we're not there, but that's gonna take higher revenues where we can, you know, absorb our overhead costs, at a greater level. I mean, you know, we made some, some progress. You know, the, the 21% we reported this quarter is, you know, our best in a long time. Clearly, at this, at this stage, engineering services are more profitable than, you know, our own product sales because- ...you know, we don't have we don't assign the same level of, fixed, you know, manufacturing overhead costs, you know, to, to those product offerings. When we get to actual, you know, production, you know, again, it's gonna depend on, you know, the account. Defense customers, you can usually command a much higher price and which results in a higher margin. Of course, the volumes are less. On the, you know, a consumer-based, let's say, OEM or ODM relationship, you know, we'd be looking at a much lower margins. However, total should be much greater because the units they would ultimately move, we hope, would be greater. It's gonna be, you know, a mixed, a mixed bag, depending on our, our, you know, our overall, you know, revenue mix. You know, defense has the biggest margins, you know, commercial, engineering services, we, we always get at least 50%. Products, components is probably gonna be less, particularly when we get into consumer-oriented products. Our, you know, our smart glasses today, I mean, when we sell them on, you know, on a standalone basis, you know, we're, you know, we're, we're getting in the, the 50%-50%+. You know, we, we have the, the overheads and other costs to deduct per, per GAAP. It's all, it's all related to volume, and we hope to get there sooner than later. Got it. Very, very helpful. Congrats on the continued top line momentum, guys. I, I appreciate that. Thank you. Thanks, Jack. Our next question comes from Jim McIlree with Dawson James. Please state your question. Thank you. Good evening. I want to understand a little bit better the mix on the smart glasses. Is it mostly M400, or is there anything else that's meaningfully contributing to revenue this quarter? Yes, it's mostly M400s. I will say, though, Jim, that we're seeing positive momentum in our Blade side of it also, and there are some portions of our Shield business that is looking like it's starting to ramp nicely. It takes time for the optical see-through systems and the solutions around them to be finalized. If you think about the M400, it's been around for three or four years now, whereas, you know, the Shield and the Blades have only been around for the last, well, Shield's one year at most, and we've been shipping that just to the developer community so far. That's going into overdrive here in the fall of the year. Yes, and we don't normally advertise the mix of products that we're selling for competitive reasons, but without a doubt, the M400 is the front runner right now, with, with the these two other racehorses coming up from the, the back. Okay, great. That's helpful. You talked about a large format waveguide. I'm trying to understand if the large format waveguide is tied to these OEM projects that you are expecting to either consummate or begin production in the second half of this year. That is, do you need to get the large format waveguide, you know, finished, qualified, tested, et cetera, before those projects can move forward? It's a definitely a new process for us, but it works. A full up volume production program probably does need a little bit of work, Jim, but it's not science. It's just turning the crank, quite frankly. It's not, it's not, it's not critical for our core business, for any of our wearable technology, et cetera. This is a new opportunity that gets opened up for Vuzix. You know, the waveguides that are in a pair of glasses like a Shield, right? They're like a 50 mm diameter, like, you know, a lens in a regular pair of glasses, which is really cool. We now are capable of making things that are like 10 x much bigger than that even. We could make a 72 in television size waveguide kind of a thing. I'm, I'm just exaggerating a little bit there, but it can be quite large. With these, you can do all kinds of things that are not head-mounted display related. Very, very quickly, though, something that's related to a head-mounted display is a heads-up display. It's a very easy extrapolation to go from something that's, you know, 2 in diameter to, let's say, 6 in × 8 in kind of a thing, and make it a window that you can look through as like a heads-up display in your car. It's exciting because there's a big market opportunity, especially in aftermarkets and the stuff like that, for heads-up displays in all kinds of vehicles, from aircraft to luxury cars to a Volkswagen Beetle that wants an upgrade to have a heads-up display in it, kind of a thing you might imagine, right? It's not, it's not something that's cornerstone for our OEM business. It's just something that we can do now, and we have more than one customer saying, "If you guys can do this, we would buy from our OEM group, those kinds of solutions and volume from you. Is it reasonable to expect that a large format waveguide would contribute to revenue? It sounds like it's, you know, at least one year away. Is that... Is my timeframe correct on that? You will see engineering services, NREs before that. Knock on wood, you should see it before that. Right. Okay. I just want to confirm something that you said. You're expecting additional OEM contracts or NRE or services revenue in Q3, although the contracts that you have right now, you're pretty much delivered on all of them. Is that right? You're expecting to start some more before the quarter ends. We, we've delivered the bulk, but these guys are in discussions with us about phase III kinds of stuff, et cetera. Yeah, you're, you're just gonna see some more continuation of programs, but we've already made some announcements regarding and, you know, one of them is very public with companies like L3Harris. You'll see follow-ons from those, and you'll see new, new companies coming on board. It's a growing piece of business for us, Jim. It's a growing piece of business. It's, it's new, and it's folks that have been with us for a bit now. All right. Very good. Thanks. This business is only really a year old for Vuzix. Anything we were doing previous to that was ad hoc. Somebody knocked on the door. We have an active effort that's going on now, so it's starting to pick up. Thank you. You're welcome. Ladies and gentlemen, we have reached the end of the question and answer session, and I will now turn the call over to Paul Travers for closing remarks. Well, I'd like to thank everyone for your interest and participation on today's call. We're looking forward to the ribbon cutting ceremony for our waveguide mega factory this fall, and please look for us at multiple investor conferences we'll be attending throughout the rest of this year. Have a nice evening, everyone, and again, thanks for joining the call. Thank you. This concludes today's conference. All parties-