Good day and welcome to the Precision Optics Reports First Quarter of Fiscal Year 2022 Financial Results Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Robert Blum with Lytham Partners. Please, go ahead.

All right. Thank you very much, Betsy. And thank you all for joining us today, as Betsy mentioned, to discuss the financial results for Precision Optics for the first quarter of fiscal year 2022 ended September 30, 2021. With us on the call representing the company today are Dr. Joe Forkey, Precision Optics Chief Executive Officer; and Dan Habhegger, 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. Today's conference call is also being webcast with replay capabilities available, both through the webcast, as well as through dial-in instructions, the details of both were included in today's press release. 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, and 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, draft, 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 our filings with the Securities Exchange Commission. All forward-looking statements contained during this conference call speak only as of the date in 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 the 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 to discuss our first quarter fiscal year 2022 financial results. This is our third investor conference call in the last month-and-a-half, following our year-end call in late September and our Lighthouse acquisition call in early October. So I wanted to thank all of you for your continued interest and participation. During the call today, I will review the results of the first quarter. But perhaps more importantly, I want to provide an outlook for the remainder of fiscal 2022 and beyond. It is an exciting time for us. In the near term, we see significant opportunities in the pipeline projects nearing production, a list that has grown substantially with the acquisition of Lighthouse Imaging. And in the longer term, the combination of capabilities available at POC and Ross Optical with those of Lighthouse positions us very well to respond to the needs of our customers. I'll start with a summary of the first quarter results. While our overall revenue for the quarter was down year-over-year, our production revenue was the highest it has been in the last four quarters coming in at nearly $2 million compared to $1.9 million in the most recent sequential fourth quarter and $2.2 million in the first quarter a year ago. The year-over-year change is consistent with what we have experienced the last few quarters as the pandemic has reduced our production revenue for release products by slowing or postponing production on three of our major programs. One of these three programs for which reorders had been delayed is our main defense production program. I'm pleased to report today that we finally received the reorder for this product, the first since the – since before the start of the pandemic. I will provide…

We will now begin the question-and-answer session.

Hey, Betsy, while we see if there are any questions, I'll -- Joe, I've got a couple here. I'd like to maybe see if you can address. You chatted a little bit about the single-use project, some of the know-how and some of the learnings that you've developed as a result of it, without going in anything that you feel is proprietary, is there anything you can expand upon what some of those learnings may have been to this point?

Yes, sure, Robert. So let me make this comment. So, obviously, as a technical company, any of the engineering pipeline projects that we're working on has some technical aspects to it. And as we work to roll our capabilities into the specific requirements for our customers, we always are advancing the technological side of the things that we're doing so. So sort of, obviously, we're improving our technical capabilities as we work on these single-use projects. The obvious areas in the area of patentable inventions, and those sorts of things. And in this case, there are three places where we have applied for patents that we think will be useful for other single-use projects. But I think in this case, it's important to point out that a big part of what we are learning, as we work through this particular project, as our single-use project that has gone as far as this one has and has gotten as close to production as this one has, is the kinds of know how that you can only get by running a program all the way through the process of going through the development and into production. And as I mentioned in my in my comments, we've already built 500 design validation units. Now for a regular reusable production product, 500 units is basically one to two years worth of production. And so in this case, we've built all of these units just as part of our development process. And the kinds of things that we are learning and that we are -- that we're getting expertise in are things that are fairly specific to single-use requirements. And so these are things that have to do with the design for manufacture, the way that you set up production lines, the way that you…

All right, Joe, thank you for that. I do appreciate it. One other item here and I'll turn it over if there are any other questions here. You've chatted a little bit about the lighthouse programs that are set to be, in production over the next 12 months or so, I know you mentioned you might provide some additional details next quarter. But anything that – that might be important to add during this call here?

Yeah. Sure. So, as you can imagine, a lot has been happening in the last – in the last couple of months. And still so – so I and the POC team are still getting – getting all the details of some of these various projects, which is why I thought it made more sense for us to discuss them in some detail at the next earnings call. But let me just give everyone a little flavor for some of the things that Lighthouse is doing that we're pretty excited about. So I mentioned in my comments that, there were four projects in particular that we expect to go into production in the next 12 months. Again, without going into lots of detail, I can tell you, one of them is in the area of otoscopy. So it's basically an otoscope. One is in the area of in ophthalmic scanning system. One is in the area of small-size arthroscopy for carpal tunnel procedures. And the fourth one is a laparoscope that would be used for robotic surgery. As you can tell, if you were listening carefully, some of those things are in similar areas that POC is working in, in terms of the disciplines. Some of them are in areas that we've talked about in the past, but haven't been talking about recently, robotic surgery, for instance. So there's a – there's a nice match in terms of the commonality of the disciplines and the kinds of technologies that you need to address them between the things that Lighthouse is doing, the things that POC is doing. But there's also some things in that list that, I just laid out, that are a little different from some of the things that POC is doing which helps us to expand – expand the footprint of the company, if you like. Again, without going into lots of detail, what I can tell you is that, for all four of these programs they have – they have gone through various levels of clinical trials, and have had positive responses from their customers. Their customers are ready now to move to the next stage which is to start pilot builds and to go through the regulatory process. One of the programs has already been cleared by the FDA, and could have pilot bills as soon as this quarter. And if they don't come this quarter, they almost certainly will come next quarter. The other three of these projects, as I – as I've already said, we expect the first production orders to come through in the next 12 months. So I know that's not as much detail as everyone would like, but maybe that will give people sort of a sense of what we see coming from the Lighthouse side of things.

That's perfect, Joe. Thank you very much. Betsy, if there are any questions, I'll turn it back over to you again. Thank you.

This concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

Thank you, Betty – Betsy, and thanks everyone again for joining us on the call today. I do look forward to speaking with many of you during the MD&M show and during the Lytham conference. Thanks everyone. Have a good day.