Good afternoon, everyone, and welcome to Data I/O's Fourth Quarter 2025 Financial Results Conference Call. Please note, today's event is being recorded. At this time, I'd like to turn the conference over to Mr. Jordan Darrow, Investor Relations. Please go ahead, sir.

Thank you, operator, and welcome to the Data I/O Corporation Fourth Quarter 2025 Financial Results Conference Call. With me today are the company's President and CEO, Bill Wentworth; and Chief Financial Officer, Charlie DiBona. Before we begin, I'd like to remind you that statements made in this conference call concerning future events, results from operations, financial position, markets, economic conditions, supply chain expectations, estimated impact of tax and other regulatory reform, product releases, new industry participants and any other statements that may be construed as a prediction of future performance or events are forward-looking statements, which involve known and unknown risks, uncertainties and other factors, which may cause actual results to differ materially from those expressed or implied in such statements. These factors also include uncertainties as to the impact of global and geopolitical events, international tariff and trade regulations, order levels for the company and the activity level of the automotive and semiconductor industry overall, ability to record revenues based on the timing of product deliveries and installations, market acceptance of new products, changes in economic conditions and market demand, part shortages, pricing and other activities by competitors and other risks, including those described from time to time in the company's filings on Form 10-K and 10-Q with the Securities and Exchange Commission, in our press releases and other communications. The company may also reference GAAP and non-GAAP financial performance measures, including onetime items, which are intended to provide listeners with a means to better understand the company's performance. Please refer to reconciliations in our earnings press release issued today after market close. Finally, the accuracy and completeness of all discussions on this call, including forward-looking statements should not be unduly relied upon. Data I/O is under no duty to update any forward-looking statements. And now I'll turn the call over to Bill Wentworth, President and CEO of Data I/O.

Thank you, Jordan, very much. Thank you for everybody dialing to the call. And I want to start off, obviously, this is a Q4 earnings call, but obviously, there's a lot that transpired over 2025. It was certainly a little more difficult of a quarter than we planned. There were a lot of things and headwinds that still continue with tariffs. But I want to assure everyone that, that did not waver us from the continuation of our transformation. You have to get through these tough times and you can't stop the transformation in this company needed. Data I/O had some transformation work that was fairly heavy. We did invest a lot of money into the business, specifically our platform. And I'm pretty proud of the team, very proud of the team and how we ended the year and how we've teed up this year, which I'll talk a little bit about shortly. The setup, our mission throughout '25 was to transform Data I/O for long-term growth. That plan proving to be approximately 1 year ahead of schedule. I've been through personally quite a few transformations in my own business and with other companies. So this is something I'm fairly good at measuring. I'm pretty -- I'm very confident that we are ahead of schedule. There are things that could even speed that up throughout '26. We executed against 6 strategic priorities, modernizing the go-to-market, which you'll hear about a little bit later, investing in our core platform. That was #1, then we started that early in '25, strengthening customer relationships. We have really got out in front of customers myself personally, probably really extended more of our employees into talking customers, which is so important in order for transformation to really occur because our team needs to hear from…

Thanks, Bill, and good afternoon, everyone. I'll take this time now to walk through our fourth quarter and full year financial results, covering revenue and bookings, our revenue mix, margins, operating expenses, bottom line and then also some balance sheet items. Net sales in the fourth quarter were $4 million, down from $5.2 million in the fourth quarter of 2024. For the full year, net sales were $21.5 million compared with $21.8 million in the prior year. Similarly, fourth quarter bookings were $3.1 million, down 25% from $4.1 million in the prior year period, while full year bookings were $18.6 million, down 17% from $22.5 million in 2024. Regionally, 2025 bookings and revenues were strongest for customers throughout Asia as North America demand remained consistent with the prior year, but Europe declined. Moving forward, as a global company headquartered in the Western Hemisphere, Data I/O is well positioned to support customers migrating manufacturing facilities to the Americas. In terms of mix for 2025, consumables and adapters and services represented 58% of total revenue for the year, providing a stable base of recurring revenue. As a result, deferred revenue rose to approximately $1.5 million on December 31, 2025, up from $1.4 million as of September 30 of the year. Capital equipment sales represented the remaining 42% of 2025 revenues. Demand for capital equipment continued to be negatively impacted by the realignment of technology spending with AI-related data center investments at the forefront. In particular, reassessment of EV capacity and manufacturing impacted the company's largest end market, the automotive electronics sector. Notably, sales to the automotive electronics sector represented 52% of 2025 bookings compared to 59% in 2024, while backlog -- overall backlog as of December 31 was $2.3 million, down from $2.7 million at the end of September. All that said,…

[Operator Instructions] Our first question comes from David Williams with Benchmark.

So, Bill, good to hear from you, and thanks for all the updates. I guess maybe first, can you maybe talk a little bit about the semiconductor manufacturing and maybe what the reshoring does, especially as we come back to the Americas regions. What do you think that means for your revenue opportunity? And is that an area of growth and opportunity for you in the near-term?

Well, Dave, thanks for the question. Great to hear from you. Semiconductor manufacturing coming back to the U.S., I mean, it's great. Obviously, it creates a lot of jobs, which creates growth in other domains and things like that because of factories being built. I wouldn't say the semiconductor manufacturing coming back to the U.S. directly impacts us. What is impacting, again, as we talked about AI build-out, and that's not at the hypervisor level. This is the edge of the network, right, to be able to have all this automation that's coming our way that's going to be AI-driven and AI-enabled. What we're seeing though is, sure, there's some reshoring going on. That's the other thing that we're seeing is not the semiconductor side, but just products being built and brought back to the Americas. We're seeing things like factories kind of spinning up and activity that we really didn't think that would happen until second half of this year, starting early in the first half. It's been a little slow out of the gate, but the conversations are definitely picking up. We've got a lot of -- we've got conversations with quite a few clients and new logos that were not in part of our revenue plan, and they're very definitive about when their production is going to start, when they need systems. And I will say the plan that we put in place, our strategy, we've been displaying to these customers, existing and new. The comments are things like you're exactly the supplier we're looking for. You're hitting all the areas that we provision data and need to provision data. And in the past, we were in 1 box. Now in the 3 box, we'll get there. Obviously, that's part of the plan that we'll execute this year inorganically and organically. But it's to be able to be in a position to address the different areas of data provisioning. The great thing about the strategy is, David, is that we have the platform. It's not like I have -- we have to go out and buy a new technology or make some other investment, which does create risk when you do M&A. We get to use exactly what we've been investing in last year. Going into this year, we're just putting it in other areas of the data provisioning like security. I hope that answers your question.

Yes. Great color. And then maybe just speak to the AI-assisted software development. And maybe what that means...

Yes, absolutely. [indiscernible] huge evangelist of this, right? So I can tell you personally, I probably watch AI way too much on TV and not shows. I'm talking podcasts, educating myself. When I first became a Board member, it was one of the things we created as -- one of the first couple of meetings was getting AI to just search the technical documents that come from semiconductor companies. These would normally take the engineers 3 to 5 days to read through to get all the information that's important to load the table up to create an algorithm as an example, that would take 3 to 5 days. Now the Doc AI that we created 8 years -- 18 months ago, almost 2 years now, it costs them in the project, the POC and to get it to work and function probably costs $120,000. I can tell you today, if we did that same project today, it would cost about $100. That's how far AI has advanced. So to give you an example, we are now creating a CI/CD process, and I know this might be over a few people's heads, but that stands for continuous improvement, continuous development. That's what you have in every software process. It's important to have that built into your DevOps and Agile. So what you do is, when you're writing code, you automate all the functions and what it takes to write code and get software tested and then more importantly, released. So for the first time, we have AI that we built in our process that actually released production code this week. So meaning like very minimal human intervention. That's how far it's come. And so we're adopting -- we've mainly been using Quad. It's in -- we're using it across every department,…

Yes. I mean...

I could go on and on about AI.

I won't take open objections to the word easy. But it's certainly the speed at which we're doing what are fairly time-consuming tasks like mapping your old chart of accounts to the new chart of accounts, creating new chart of accounts, putting in new policies. The speed at which you can do that with assistance from AI, obviously, overseen by people, making sure everything works. It's just accelerating and derisking the process. And I think it's probably the biggest impact on ERP is going to be the reduction in implementation costs as we go forward. It's just amazing how quickly we're getting the ball in place.

We have a current example. We just launched Salesforce Service Cloud 2 weeks ago, right? Actually, soft launches 2 weeks ago. Formal launch was last week, a week ahead of schedule, which is rare when you're implementing new software. This is -- Service Cloud is going -- is now what we use for taking ticket information from customers when they have a challenge with any of our equipment or software, and that's where they enter the tickets. That project originally was scoped at, and this is only 8 months ago was scoped at almost $250,000 with AI and with some other things that we did to maximize the process and make it easy. We did this for $100,000, and we were on time with the project. And I can tell you after 5 days, typically, you'll see -- you'll hear a lot of issues with changes substantial as that. I just talked to the Head of Service out the park lot before I went and ran an errand. I said, how is it going, Sam? He's like 5 days in, we're good. Like no noise, no challenges. There haven't been any problems with the customers being able to answer tickets. I mean -- and AI was a big part of that.

Great. Really fantastic color there. I appreciate it. And maybe, Charlie, just one for you. Just kind of thinking about the balance sheet and where you are, how -- what's your level of comfort, I guess, with the balance sheet given the strategy and kind of what you see out in front of you?

Yes, I'm comfortable with it. Obviously, we did drain some cash last year. That's sort of the inevitable outcome of making the investments and the transformation that we were undergoing. But we do see that there is a turning point through the course of the year here as we -- we are very focused internally on controlling costs. We're making moves that we -- like I said, we expect to be at least $1 million of run rate savings, and that will happen through the early part of the year. So we'll realize a lot of that through the course of the year as well. This is, I think, a very solid. We're a debt-free company right now with decent cash on hand and in a good position to sort of execute on the strategy we have, both organic and -- organic and inorganic, excuse me. And I really don't have any -- it doesn't -- certainly, the balance sheet does not keep me up at night. ERP transformation is keeping up at night.

But I would say in that to add to that, David, is that going back to AI, and I'm sorry to go back to this, but the transformations do cost money, right? And the thing is that coming into the business over 1.5 years ago, this company was very thinly threaded, whereas you were going to need additional resources to do transformations. They don't happen on their own. I can tell you that AI has an impact in lowering the cost of the transformation, especially where we are today and moving forward, then I don't have to hire a bunch of resources to continue the transformation because AI is picking up a lot of the slack and creating product -- huge productivity increases, especially in engineering and software development. So it helps in all areas and will create new sources of revenue for us.

Our next question comes from Michael Legg with Ladenburg Thalmann.

I wanted to dig a little deeper into the M&A pipeline and where you are there. Could you just give us a little update on how that's going?

Yes, absolutely. Mike, as we've talked about, that was certainly a big part of my charter and strategy. And this goes back to October of 2024 when we laid out the original strategy of the Board to get into these other capabilities. We have -- we are in a data room was just opened up on one of our opportunities just 2 nights ago. We have another one being opened up most likely tomorrow. I got a call from a CEO in one of our strategic initiatives to meet at APEX to discuss a serious discussion around acquiring their business, and we have 2 other irons in the fire. So it is a quite active pipeline. More in there -- probably a little more than I'd like, but at least it gives us choices, and that's great. I fully expect something to happen this year. Obviously, we wouldn't be having these conversations. But everything, again, is directly tied to the strategy that we discussed. So very active pipe, Mike. And there's more behind that once we get through a few of these that fit exactly where we want to fill and the holes we want to fill in our strategy. And then we will refill that pipeline, and we will take another pass at it next year.

And Mike let me just follow-up on that. I do want to emphasize that both Bill and I are very disciplined acquirers. We have already walked from a couple of transactions, and it did not make sense once we got into looking at the financials. We are not going to be -- we're good stewards of the capital of the company. We have very exciting targets that we are looking at. We're enthusiastic about them, but we're also not in deal heat.

And they're day 1 accretive. That's the important thing. I mean, really accretive in a couple of cases. And the important thing, too, Mike, is I've done a fair share of M&A activity. And I can tell you, it's really important. Look, there's things like roll-ups and things like that, that the private equity firms have been doing from day 1 with their LBO funds. There's not a roll-up. This M&A strategy is a place where you have a company that has vertical capabilities and a business that has horizontal. When you put those types of companies together, it accelerates growth because you're filling each other's gaps. And that's where M&A really makes sense, logical sense, but good financial sense as well.

Okay. Great. And then obviously, we have some headwinds in the industry right now. You talked -- you mentioned in the fourth quarter, you saw a lot of good customer activity. Can you just expand on that customer activity and what you're seeing?

Yes, sure. I wouldn't say Q4 had a lot of customer. There were some conversations. A lot of it was tailing off like we'll talk to you in Q1 and Q2. So those were good conversations, trying to get an idea. You're always trying to set up next year, right? So you do a big push, trying to find out when budgets expire, what's left, what's the budget going to look like next year? What are your projects you're working on? A good amount of our pipe this year that are opportunities that are in our pipeline, revenue plan, 75% of them are new from last year. I mean, so we've had conversations throughout the year, and they're not all new logos, but just new activity, right? Some new logos, it's a big push. It's the reason why we developed the manual product line. We've got reps ready to set up orders in Q1 for our manual systems, which we should start to see next month and to get those manual systems both here in North America and China. I just came fresh off a trip from there, met with one of our largest customers that's a big supplier to BYD. We have new products coming. As a matter of fact, they brought up and asked for a solution just so happens, we're already working on it. And so they offered to be our beta client. And so that's in our pipeline for the second half. So a lot of exciting things across the board. But yes, those conversations are starting to now look at -- turn into purchase orders as we get into the end of Q1 and definitely into Q2. I mean there's a lot of -- and I think the tariff thing recently pulling that back, there's some pent-up demand back there. I can't tell you how much. I think that will have an impact and give us a little bit of a tailwind, but we'll see. But outside of that, the build-out of Edge AI, our existing customers, the solutions we're bringing them, the new plan that we have to be in all areas of data provisioning, the customers love the story.

Great. And then you mentioned you're a year ahead of plan since you took over, Bill. Can you just kind of give us some of the thoughts you have on 2 years ago, what you thought versus what you're seeing today, some of that why you're ahead of plan, what positive upside you may have seen that you might not have thought of a couple of years ago?

Yes, absolutely. It's a great question. And it's a hard thing to measure, obviously. But in year 1, there's always a significant amount of investment because you're going to have to maybe kill old contracts or you're going to have to swizzle the management team. You're going to have a bunch of onetime costs. We're paying for things that weren't fixed in the past 3, 4, 5 years ago, right? So a lot of that was really all in 2025. We're still investing in '26, but the investment right now is directly in new products. It's directly in areas that are going to drive revenue. So there's no more -- I would say the cleanup is pretty much completed. I would have thought it would have taken longer. But as I said, the tools we're using and the technology we're using to get there faster has paid huge dividends, and that's only going to accelerate. So yes, I think we're probably -- typically, transformations of this nature are 2, 2.5 years, we're a good 6 months ahead of schedule, could be more. But easily 6. So that's why we feel really comfortable with the revenue plan this year and get to where we've articulated.

Our next question comes from George Marema with Pareto Ventures.

So Bill, as you guys are moving into physical AI and kind of in-line programming, what are you replacing out there? What are you competing against? And just internally as a company moving into these new areas, what kind of changes in distribution and sales and marketing motions need to happen to fully realize this?

Yes. The great thing is we don't have to change anything. These are existing customers and some new logos that are large contract manufacturers that we call on globally. They're now obviously been tasked with new projects to build out the edge of the network, the products that fit that. There's one campus we went to 80 acres. And next to them is Google, Verizon, a bunch of other companies that have created products that they're going to build for this build-out. This is a massive campus, massive. And that's -- so it's really -- we're not changing channels. I mean we are handling more of this direct, George. I will tell you that's one of the things that -- look, the reps we've had in the past, the good reps and there's reps that, quite frankly, are old and tired. And so we've been revamping that slowly. We changed all their contracts this year. We're very specific in what they need to do. And if they don't, they know that we will go into these accounts direct. I want to make sure we control our revenue this year. And in the future, it's important. And there's no reason to -- look, nobody is going to sell your products with passion than the people that work for the company. It's just not. And so our team is very passionate about what they're doing. They're very knowledgeable. Most of them have been in this industry for quite some time, and that's the new blood we brought in. So people like Monty and Dean and others. And again, we're looking to add more sales resources through this year. So that's where the investment is going to be in revenue and growth. I hope I answered your question.

Yes. And then on the cash flow flipping positive, what kind of revenue do you need to achieve that?

Well, it's tough to say. I mean, obviously, we're reducing and optimizing the business monthly, honestly, and there's some significant optimization that's coming, some we've already done in Q1, which we'll talk about after Q1. Charlie, I don't know if you want to comment on that.

Yes, obviously, we can't give -- we're not giving specific guidance on revenue, but we believe between the upside on revenue and the cost containment and the cost reductions we can implement that we are pretty comfortably. And you can see what we did last year. You can sort of project from that and say if the 2 lines are moving in opposite directions, both in a positive way, there's a point at which they cross pretty close to where we were.

Okay. So perhaps back half '26, you can flip it.

I think that's probably a reasonable type of...

I think that's fair.

Our next question comes from David Marsh with Singular Research.

So your predecessor was pretty heavily focused on electric vehicle market. You talked a lot about that. And we are starting to see some new products come out and start to take a little bit of market share and starting to see that evolve a little bit. I just wanted to get a sense -- I mean, is that -- clearly, you guys are focused on new and different markets. But can you talk a little bit about activity in that market specifically? And if that's something that's still a revenue driver for you guys?

Oh, yes, absolutely. Automotive will still remain a pretty strong market for us. Obviously -- actually, some of the customers we talked to, I'll give an example, a large German automotive company, Tier 2, actually had told us at Productronica, this was in November. And they had said, we're not going to buy any CapEx for all of 2026. Well, we just presented to their larger team down in Mexico. And after we presented where we were going, so they want us to actually present to their global tech council next month because they were so impressed with the places we're taking our technology and solves a lot of problems that they've had on their board to figure out how to manage data provisioning. Data provisioning because there's so much content in cars and other products, it's a larger conversation nowadays. It was still 52% of our bookings last year. So it still remains a strong market. The customer I was talking about for beta-ing are -- one of our new solutions is an automotive client. And they're the provider -- one of the largest providers to BYD, which is an EV company. So no, none of that changes or stops. If anything, we're trying to bring new solutions to them, which we are, that will gain more market share for us, but also provide them solutions that they don't currently have today. So kind of that expands the -- it's kind of a market expansion as we drive these new solutions. So no. And in the other case, we're looking forward to that meeting, but the person who actually said that they weren't going to be buying any CapEx is actually on that council. So we're looking forward to that conversation. So -- but no, I will tell you the strategy we have is spot on and it's crystallized and the customers are 100% nodding up and down.

Got it. And the agreement with IAR, I mean, it's really -- it seems like a really tremendously positive step for you guys. I mean are there other agreements that you could potentially look to ink with some other folks that might be able to provide you those same types of opportunities? I mean I know you have a pretty long history with some of the major electronic component suppliers out there, you had similar conversations with any of those that you might be able to allude to?

Absolutely. And that's -- I'm a big fan of partnerships, like real partnerships where both people win. And IAR, that took a year, right? These things do take time. The great thing about IAR is this was a company that was fallen out of favor with Data I/O. And it actually started at an embedded conference in Nuremberg, Germany, and I'm with my team and they're like, I'm walking towards their booth. I like where are you going? I'm like, I'm walking over there. They're in security, large company, we should partner with them like you do know that is -- the company bought Secure Thingz, and we had fallen out of favor with them. So I walk in, "Hey, I'm Bill Wentworth." They're like, well, they don't really like us. I said, they don't like you. They don't know me. So walk into the booth, right, completely oblivious and start up a conversation. The first guy I run into actually worked at Arrow before he joined the company, and we knew all the same people. So it broke the ice right away. We had a conversation. That conversation led to this agreement. And look, people like Monty Reagan, our VP of Sales, drove this relationship for the last year and ended in this result. They have a huge algo library. We have one. You combine those 2 with a frictionless solution, we will be the choice in security. I mean I know that might be a bold statement, but their software development kit is one of the best in the industry, if not the. But your point to, can this lead to other relationships? Yes, because guess what? Their relationships are with semiconductor companies. So as our relationship grows, I'm sure we'll get opportunities with their relationships because as we've created this collaboration, the one thing I say in partnerships, look, we won't both always win. And it's okay. But I'd rather have a ton of at bats than none at all. And so that's the type of real true collaboration partnership you want. And yes, David, we're going to look for more and more of those. Absolutely. It's how this company will grow organically and take share.

[Operator Instructions] Our next question comes from Casey Ryan with WestPark.

Great update. We've kind of picked over the bones here in this call.

You got to get first in line.

I didn't realize it was going to be such a bum rush tonight.

I love it.

Yes. No, it's fantastic. Well, so one question just about the gross margin dip, I think, obviously, tied to revenue, we all understand that. But what do you think is the rebuild? Is it sort of over all 4 quarters through the year? Or can it bounce back a little faster to that? And is like 51%, 52% kind of the right normalized rate in some normal quarter down the road?

I'll let Charlie take that one. He's been studying hard.

I think it will sort of be through the course of the year, though not necessarily purely linear. I think it will come back a little bit faster than -- again, it is tied to volumes, a big part of it at least. And there's a mix shift issue. So there's some of the new products that we're going to be selling, particularly in the back half of the year, higher margin, that will help certainly. Again, we're not giving firm guidance, but I think that if you sort of look at historical levels, that's probably a reasonable starting point. And then mix will play a big part.

And great question. Margin is always on everybody's mind. As we build more value in our software, one of the things that we've done and we'll be releasing, you'll see probably a release next month of a piece of software that really brings a tremendous amount of value. We've been demoing it already with customers. This is the other thing that's gone really well with these customer visits, and they see the value. But what it's going to allow us to do is increase our attach rate on our software for on our equipment. And as you know, that's highly profitable revenue. We have -- I would say our attach rate is probably at 20%, 30%. We should be able to double that throughout the year. And that's a significant boost.

It will both increase the attach rate and the retention rate. So we're looking at boosting, not only helping the gross margin, but helping the overall margin profile of the company and then having sort of a repeated -- contractually repeated revenue source.

Because a lot of times, they would buy these interesting. And this is -- look, the programming industry, I know, has been in it for a very long time. And look, we take advantage of the rules that they didn't have in place, like we would get a software agreement and then we would use it on other machines because they just weren't that sophisticated. It's happened in this industry. There's a way to close that off. And it's one of the things I said, look, we should not have a customer running our equipment without a software contract. I want to get it to the point where none of them can, and they shouldn't be, honestly, because it's not good for their business and induces risk, especially because one of the things we're going to build in our software stack is the ability to do things like have security built in, like recognize illegal handshakes between our equipment and their network because we don't know where that security breach could have came from. And these are things that are very important to IT departments, CIOs, chief security officers across the board. It's been something that's been ramping up over the last 12 to 18 months anyways. So as we build more value in our software stack, it will force them to have to have their machines under contract, which -- it's one of our initiatives this year.

Right, right. Okay. And then just one quick question about the concept of maybe some acquisitions to maybe to add services. Beyond being accretive, are you sensitive to the size? Like is there sort of a minimum size that like you're thinking about? Or is geography relevant? Like does it need to be a U.S.-based service sort of for...

Yes, it's a great question. It's a little bit of both, honestly. Geography, that to me is definitely strategic, right? I mean we do have obviously a significant operation in China. It would be good to derisk that a little bit in Asia, right, because Asia will continue to be a strong market. And it's a market, quite honestly, we're weaker against our competition. So my goal is to strengthen that, right, especially with our new products, but also with a footprint. So that's important. In the U.S., certainly easy to do transactions in the U.S. So those are not only geography friendly, but also strategically friendly as well. So services is a very fragmented industry. I know I was in it for a long time. It's as fragmented as ever. So there's opportunity there. And so we're going to take advantage of that.

Both Bill and I have experience doing international transactions as well as domestic. Obviously, there's complications that come with international, but there's also opportunities that come with international because we are comfortable trading where other people might not want to walk.

We have time for one more question before concluding the call. We will now take Howard Root, retail investor.

I'll keep it real short after delay. But 2 little quick things. One, Bill, when you stepped in, you really had 2 sets of challenges. One was the market, the other was the product, kind of the platform in that it wasn't integrated. You didn't talk anything about the product status. Has that work all been done to integrate automatic and manual programmers?

Yes. Yes, it has. And so that software, we now can run both our manual engineering units and our automation units on the same software. There's still some cleanup to do, especially in the handler side of things, but we're probably 3 months away from cleaning that up 3 to 4. But as far as that integration, yes, that unified platform is what we talk about a lot with customers because that platform, again, is also will be used in services and at tests when we get there. So fully integrated, fully compliant, forward compatible with algorithms. Obviously, we still got a -- we do have a legacy product that we're going to start to migrate from. That also is a revenue opportunity in the next 2 to 3 years and starting this year as we start to get customers to migrate to our LumenX platform. So that's the thing. We're out talking to customers that have been with us for quite some time, talking about kind of where FlashCORE is today, how long it's going to be along and that we need to start migrating to LumenX. So that will also be a revenue boost for us over the next 2 years.

Okay. Great. And then in terms of cash flow, just to follow-up. I mean, you ended the year a little under $8 million in cash. Near-term positive cash flow you're saying, but that looks like second half of the year, not first half. And then you're talking about the acquisitions and then you've got the shelf that you filed out there. Obviously, the stock being depressed to use that as a currency is dilutive. Can you do the acquisitions and run your business without issuing any more shares in order to accomplish that? Or is that going to be -- you're going to need a financing here in order to accomplish what you want to do?

I know. If you want to take it...

Yes. I mean there are alternative sources that we're exploring, and we're building some -- we have -- I have some relationships as is Bill to look for nonequity sources of cash. Would there be -- I'm not going to say that there wouldn't be any component of equity in the transaction, but I wouldn't expect it to -- I don't think we're looking at a wholly equity type of acquisition. And then some of it depends on the scale. We're looking at a couple of different things. They are of different sizes. The size obviously plays some role in how much would be...

And how the deal is structured, too, right? So there's been a lot of different options on deal structure. There are some that are very favorable to cash. Like you don't need much of it.

Yes. There's a lot of -- there's a couple of different permutations, but I don't think you're going to look at us just issuing stock for a company. I don't think that's what you're going to be seeing.

Okay. And the reason for doing the shelf registration?

I'm sorry?

The reason for doing the shelf registration.

What was the reason for -- yes, for the shelf.

Well, it is to have that flexibility. I mean there's not many public companies that don't have some kind of shelf registration because it affords you flexibility if there is -- if an opportunity that's sort of uniquely strong comes along. And as I said, I don't think that we're looking at not -- we may blend some equity component into some of these acquisitions. So we would need some flexibility to issue stock. But I don't -- again, I don't think we're going to see 100% stock.

No. Definitely not.

Yes. [indiscernible].

Sorry, Howard, you broke up there. We couldn't hear it.

I'm saying there's no near-term -- there's no present need or desire to tap into that shelf.

No, no, we're not going to just issue shares right now.

No.

That's not our plan. Operator, is that our last question or...

They all hang up.

Did they? Hello?

Yes. Bill, would you please...

Ladies and gentlemen, at this time, we've reached the end of our question-and-answer session. I'd like to turn the floor back over to management for any closing remarks. Bill Wentworth, Chief Executive Officer.

Thank you, operator. I really appreciate everybody jumping on -- the people that jumped on the call and really appreciate the questions. I can't tell you that's far better than reading a script, and I get to talk from the heart and where we're going with the company. I'm very proud of this team. And I'm really looking forward to this year. It was a tough, tough 2025. But those things are never easy. But I can tell you the lack of anxiety that's happening right now, granted, we still have a lot of work to do. And that pace will not stop. If anything, I would expect the pace to up. The team is ready for it, and we've had a lot of meetings over the last week or 2, getting people prepared and the team prepared for what we're going to embark upon this year and into '27. So thank you again, all of you for your time. I'm always available for a conversation. Jordan knows that. So if you want any additional conversations, please reach out to Jordan. Happy to talk about the business anytime. Thank you, everyone, and have a great day.

Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We do thank you for joining. You may now disconnect your lines.