Okay. I assume, unless I hear otherwise, I assume people can hear me. We do not have a way to check it, right? Okay. Good. Thank you, everyone. I appreciate everyone coming here physically and everyone online listening in. We will give a presentation of about an hour, I think, give or take, with Q&A and a bit more, obviously a bit more detailed than our usual 15-minute presentation. A considerable focus will be on the exciting news of the G5 acquisition and what G5 brings in. With me, we have Al Miranda, our CFO, Jason Messerschmidt, VP Sales, Natalie King, Vice President of Finance, Jason Liebert from Visimid, our older acquisition, I guess, a year and a half ago, Todd Croteau from Business Development, and Micah Morelli joining us from G5. Which way? Oh, other way. Okay. Yep. No. Wrong way. Okay. Yep.
I'll talk a bit about the landscape and about infrared imaging. Oftentimes we talk about infrared imaging, we talk about thermal imaging. Actually, those on the webcast can probably see our video feed from a LightPath camera coming from a Mantis camera here in the room, and can see me standing here and people seated. We use it interchangeably, infrared imaging, thermal imaging. I'll just explain a little bit about this without making all of us experts. Infrared being the part of the spectrum that we don't see by eye. It's the longer part of the spectrum as opposed to ultraviolet and such. When we start going down the path of the spectrum from UV to RGB, meaning visible, into the infrared, the infrared gets divided conceptually into four sections there. The naming convention is by engineers, so it's not that sophisticated, let's say.
The first part is the near infrared. Oftentimes, near infrared, all of us know it from things like night vision or low-level imaging. That is a type of imaging where it's actually very, very similar to the visible in a lot of ways. It's the same cameras, the same silicon CCDs and CMOS and so on, image in the infrared oftentimes, which is why my iPhone camera can image in a very dark condition. It's not even though it's an infrared part, it's not really a thermal imaging, if you would. After that comes shortwave. Shortwave is also not exactly a thermal imaging, although by technology, the type of detector and the way the image needs to be processed is much more similar to thermal imaging. Shortwave, however, is another way of seeing better than visible. Specifically, shortwave has advantages in seeing through clouds, through fog, adverse conditions.
Many times, shortwaves get used in maritime, on ships or in the harbor or things like that, to be able to see in those kind of conditions. Oftentimes, shortwaves get used together with one of the thermal bands, which brings us into thermal where we play today mostly, and that is midwave thermal and longwave thermal. Those are two separate thermal bands, and each of them has an advantage and disadvantage. The longwave, where LightPath has been playing until now, are uncooled detectors, which means they're much cheaper, more compact, longer lifetime. However, they can only image up to a certain distance, usually, you know, fairly short-range imaging, and they can only image low-temperature objects like people, things that are in the temperature range of, say, up to 100 degrees Celsius, sometimes a bit more.
Midwave, on the other hand, are typically, not always, but typically cooled detectors, which makes them far more sensitive and is a window in the spectrum in which you can typically image for a much longer range. That is why G5 cameras choose the midwave as the spectrum they use, because they can image up to tens of miles in that spectrum. It can also image high-temperature things happening, for example, an engine of a jet or inside a furnace like we do. What we are doing today is we are really starting to cover more and more of both parts of the spectrum.
The longwave with uncooled cameras coming from Visimid and LightPath, the midwave with cooled cameras from G5 for long-range imaging for the more cutting-edge defense use where, you know, cooled sensors with very low noise are needed, as well as some midwave imaging using our Mantis uncooled cameras, which can image in the midwave for very high-temperature events like in furnaces and so on. Any questions on? I promise this is the most technical I get. Okay. You know, why, why are we in? Why did LightPath even go into uncooled longwave or imaging, and why is there even an opportunity here to begin with? I mean, going from being a component company to being more of a system company is obviously something everyone would want to do, but it's not an easy feat to do, both technically and from a market point of view.
For us, we're at the interesting point that really allows us to do this because of something that happened and continued to happen in the market. Historically, up until around 2014, 2015, infrared imaging, thermal imaging of the infrared imaging was really almost only for defense use. Those were cooled cameras. Those were, if they were uncooled cameras, they would be very low-resolution cameras. They would be extremely expensive. Around 2014, 2015, a change happened, started from FLIR with microbolometer devices. Microbolometers are the detector, really, for the uncooled cameras. With that, the whole market started opening up, as is often the case, you know, when cost comes down, supply and demand meet, and suddenly there's much more demand, and the market is, the addressable market is much bigger.
With that, a very gradual and nice slope of growth came to the market of uncooled imaging up until around 2019. A second step of drastic change happened as a result of COVID. During COVID, contactless temperature measurement was a key technology that was identified and needed for measuring people's fever without, obviously, touching, ideally, but also in mass, without a thermometer under the tongue or so on. Thermal imaging found a really sweet application there that for a moment during 2020 was an enormous boom. I mean, a considerable growth there. What it also did, it accelerated the, how would I call it, economies of scale or the cost structure of the market.
By needing to make millions and millions of thermal devices for measuring temperature all around the world, a lot of the different cost drivers for it, in particular in the detectors, have gone down drastically. China, that before that never made really thermal detectors, started making thermal detectors at volume during 2020 because of COVID, and as a result, drove prices of detectors down even more, which, again, opened up more and more markets. We're seeing today detectors going into more and more places simply because the cost is coming down and down. Something like automotive using a camera for emergency braking system is something, for example, FLIR demonstrated with Raytheon maybe as far back as even 10 years ago, but the cost was insane. It was like the cost of a car, pretty much.
Now, you know, getting to a point where these cameras, full, full camera system for emergency braking system might reach the hundreds of dollars or even $100 for the whole thing is, you know, opens up an entire new market. You know, change drives opportunity. For us, the two changes of bolometers to begin with, uncooled sensors 10 years ago starting to hit as a technology, and acceleration of many different aspects around 2020 because of the volume there creates a great opportunity for us to enter into a market. A market that now is already touching into more and more places. Firefighting, for example, is something that if before COVID, some firefighters might have had one, what they call TIC, a thermal imaging camera, and would have for a fire engine one camera like that that the chief would hold.
Today, every firefighter is getting a camera. They're installing them on like a dashcam. Automotive, as I mentioned, smart city applications, which we'll talk a little bit about. Commercial uses in sporting, you know, a gun sight for hunting, thermal gun sight used to be $10,000, and you can get today, you know, for $1,000, $2,000 a gun sight, and so on. All of that is great for us. It expands the TAM. It drives other prices down, and it helps us create an opportunity for us again to step into this world. A bit of market data. This comes from Yole Développement, a well-known market research. I wouldn't look at the absolute numbers because obviously those are very subjective and difficult to tell if, you know, what exactly they are.
From a trend point of view, defense continues to be a very significant part of the market, but industrial imaging is expected to become as high as $500,000,000 just for the microbolometers alone. Just to explain a bit on the image here, we see a pie chart for each one of those segments. The part that is grayed out in the chart is for detectors that are non-imaging, just measuring the temperature at one point alone, where the colorful part or the non-grayed part is the microbolometers, what we call our uncooled cameras. Very growing market there, good, good growth, very significant in the industrial, even in the consumer part growing, and defense continues to grow, which is often driven more by the geopolitics than anything else. Harder to predict exactly. All that creates us with an opportunity, really.
The opportunity is that we have a changing market. The changing market is changing technologies, is changing cost structures, it's expanding TAM. It's, you know, a lot of great opportunities for us. The idea being is we do want to grow out of the component business. We're doing that because being a pure component company is a pure play, is under a lot of price pressure and is being commoditized, and we needed to find new directions for us. In addition, with the opportunity, another opportunity came up besides the technology evolving and growing, and that is more around the materials. Germanium, the key material, as everyone knows today already, comes mostly from China. Prior to the Ukraine conflict, it was China and Russia. Russia got shut out, so it's China.
You know, it's a key material for all the optics in infrared, midwave, longwave, you know, any of those, they need germanium in one way or another. We have a material that is an alternative to germanium, and we have an exclusive license that we obtained for more materials that not only provide further alternatives, but actually outperform germanium, as I'll explain a bit more. The market is growing. When the market grows, a few things happen. Obviously, the prices go down, the TAM goes up, but the other thing is the characteristic of the player changes. If 10, 20 years ago, LightPath would make optics, the optics it would make would go to a customer that designed the complete system, needed LightPath or someone like LightPath to make the individual lenses, and then built and did the assemblies.
In other words, our customers knew more about optics than we did. They were experts in optics. They just needed someone to make the lenses. The more the technology gets adopted into new markets, into new segments, new verticals, the less subject matter experts the customers are. Today, we're seeing customers that they know they need thermal imaging, but they definitely are nowhere near wanting to design their own system. In fact, they do not even want or care to know too much about the system as long as they get the pixels, if you would. Just like in the world of electronics, prior to FPGAs, as an equivalent, the only way to get an efficient integrated circuit would be to design your own silicon. Therefore, you know, anyone that was doing that level of electronics was an expert in silicon.
FPGA came in and democratized the silicon, if you would, to all the electronic companies. Suddenly, you could customize your own electronics without spending millions and millions of dollars at tapering out your own silicon and so on. Not that we are an FPGA, but there's an equivalent to that. There's opportunity for us here of democratizing the access to thermal imaging, to infrared imaging altogether, because it is still a very complicated technology. It is not a CCD from Sony that you buy and you plug in and just, and you get to build a camera. These are unique devices. You need to understand a lot about their physics, how they're used. You need to understand a lot about optics, optical coating, system design, thermodynamics of it, and so on. All of that creates an opportunity here.
All these new players coming in want to work with infrared imaging, want to do all of this, but do not want to invest $10 million just to set up the most basic lab for test and measurement of optical components, if you would. The solution is really taking our domain expertise in optics and in particular in infrared imaging that we have, leveraging additional differentiators like our materials, like our coating, continue to build more and more differentiators because that is always a protection for such a strategy, and becoming really the partner, if you would, for those companies to adopt thermal imaging and infrared imaging altogether into their systems. With that, you know, let's talk a little bit about some of the changes still happening in infrared imaging, right?
The more the material gets available, the more the components, the technology is available, the more use cases open up. For example, fugitive gas imaging, detecting gas leaks out of methane pipelines. Jason will talk a little bit about that. That is all the way from upstream, midstream, downstream, inside out. It is gas imaging, not only on methane, it is also ammonia, it is also SF6 and other gases like that. Smart city applications that Todd will talk about, and automotive such as emergency braking system in the car. Some people even talking about automotive using thermal imaging to see the number of passengers or make sure no one, God forbid, left a child in the car. That might be a bit further down the road. Supply chain changes. Germanium and supply from China, not only germanium.
I mentioned 2020, multiple Chinese companies suddenly became experts in making detectors and making microbolometers, focal plane arrays, those detectors, heavily subsidized by the Chinese government to run those fabs and learn quickly how to make good devices like that. As a result, after 2020, after COVID, all of us have an influx of bolometers and detectors and even assemblies like the ones we make coming out of China that has learned and developed that as a result of COVID. We're seeing that today doing two things. One, to begin with, it drove new markets and new demand. Again, prices going down, more applications, more uses. Secondly, we're seeing, as a result of geopolitics, most of our customers now wanting to move away from those.
Another opportunity for us, new markets opened, really that drive and cost expanded all of that, but really now opens the door to us because now everyone wants made in the U.S. or made in Europe. Further opportunities. Continued advancement in technology, edge processing altogether, not only AI. We do some AI. G5 does some processing at the edge of image enhancement, multispectral imaging, for example, as a result of advancement in detectors and in materials, so on. I bring all of those up simply because change is opportunity. For us, every change that there is is an opportunity to come in and take a bit more market share from the $800 million gorilla in the room, which is FLIR, the biggest player in thermal imaging. For that, we need to create differentiators, and we need to continue to develop differentiators.
Some came inherently, you know, materials. We had BD6. We went out and proactively licensed from NRL a portfolio of material. Some come from development. We acquired Visimid Technologies. Visimid developed shuttle-less imaging, multisensor imaging. Some of it we went and just seeked partners to do it with. Our AI hardware was done together with Maris Technology in Israel simply because we saw an opportunity, again, a change and opportunity to do something else and to create more differentiators. Some of them are just more related to process. You know, Visimid, for example, has a very agile development process, allowing them to develop very quickly customized solutions for customers. What might take two years to develop a new thermal camera can be done in agile small cycles in months now. Another differentiator that sort of came our way, but also a bit proactively, is the materials.
There are two aspects there. One is the supply chain. I do not think I need to talk too much about germanium. Everyone by now already understands and sees that. The second is the properties of the materials. To begin with, germanium, you know, obviously comes from China. We make a glass that is an alternative for it. We are not the only ones. There are other companies that make chalcogenide glass. Our BD6 glass is the exact same as the material from Schott called IRG26 and from Umicore and maybe another company. We have the other materials, the nine materials that are exclusive to us and that only we make them and only we have the license to make them. This is not to mean that we are going to convert all the customers to use those nine exclusive materials. Not at all.
You know, in fact, BD6 is still going to be the workhorse and what most customers use. Having that portfolio of additional materials is kind of like the Corvette in the corner, if you would, in the showroom example. It is positioning us as a leading company in materials, positioning us as the most cutting-edge infrared materials. Even if only 10% of the customers end up using the NRL materials, which will probably be more, way more than 10%, even if it's 10%, the other 90% actually are there partially because they know of the NRL materials and our positioning in the market. You know, some of this is technical, but some of it is also pure psychology and marketing to it. I mentioned the materials and advantages compared to germanium.
I, given we have a bit more time than the usual 15-minute presentation, I'll use that to explain a bit more about this. There are two things that these materials bring to the table. The first is they offer for optical engineers and designers, more options. If you go to design a camera that works in the visible light today, like our cell phone camera, you have over 200 different types of glass to work with. And they're very slightly different from one another, okay? They're different in what's called refractive coefficient or Abbe number or dispersion, all of those parameters that are variable when you're designing a system.
When you go to design a camera, if you have 200 types of glass to choose from, you know, you don't need to be an optical designer to understand that you have a pretty wide selection and you can really choose the optimal ones, hence come out with cameras like in our cell phones that have seven lenses, each of them, some of them nine, with pretty much every lens made from a different material because the designer made them work together to come out with the most optimal design. In the infrared imaging, specifically in the midwave and longwave, it is nowhere near that. There are less than 10 materials altogether to work with.
If you're a designer and all you have is 10 tools in your tool chest, you come up with lenses like you see on the left side here, if I can point out what's called the baseline design. This is a zoom lens that has 21 individual lenses in that, okay? There's a lot of disadvantages to having that many lenses. One is obviously the cost, right? 21 times, 21 lenses need to be fabricated. Second is the weight. It weighs much more than if you could do it with much less lenses. Also the optical transmission. Every one of those surfaces, every one of those lenses loses a fraction of a percent. Maybe 1% of the light doesn't go through, gets lost every time. 21 lens elements is 41, 42 surfaces.
That means if every one of those surfaces loses even 1%, and that's a great result to lose only 1%, you're talking about already nearly half the light gone by the time it reaches a detector. Instead, with the new materials, and we introduced here nine new materials, this is a paper that was written actually by a customer, demonstrated, taking the same 3X zoom lens, redesigning it to have 12 elements. Simply because there's more tools now in the optical designer's tool chest. Our argument and what our customers and optical designers understand oftentimes once they dig into it is you don't need to completely replace germanium. You don't need to completely replace all materials with BD6. What we're giving you is a far, far better toolset that allows you to have twice the number of materials, if you would now, and design far better systems.
That is one aspect of why that is. If, you know, if you're curious on why that is important, what is the different materials that we circled here in red, a few examples. Some of them are the fact that the thermal optic coefficient, the way the material behaves when the temperature changes, is different. Like with this one, it's negative 18. Here it is 1.2, which is nearly zero. To just to put it into perspective, a material like germanium has a thermal optic coefficient of 700. It is highly sensitive to temperature changes. Having those variables, having being able to choose materials with the thermal optic coefficient or with the refractive index, that is the optical power of the material to those levels, those are the kind of flexibilities and tools the optical designers need. Another really interesting one is the CTE, coefficient of thermal expansion.
NRL were able to develop one material that has a coefficient of thermal expansion that is identical to that of aluminum. That means that most of the lenses are held in aluminum tubes or aluminum holders. To have a material that expands and shrinks with temperature the same way aluminum does is a great advantage for the mechanical designers. Which brings us now to the other advantage of those materials. As I mentioned before, germanium is often used, but not only germanium. Materials like silicon are used because germanium is very good for imaging in the longwave, sometimes in the midwave a little bit, but it can't image in the shortwave. Silicon can image in the shortwave, can image in the midwave, cannot image in the longwave. Yes, there are 10 materials roughly, but they're very limited in their range.
Cameras are able to image in more than one waveband. It wasn't always the case. It's been developing in the last few years. Today you can get a detector that can image both in the shortwave and midwave. That's useless if the material you're using for the glass, the germanium or the silicon or so on, cannot transmit all these wavelengths. NRL's prime reason for developing these materials was this: to develop true multispectral materials. Sorry, materials that can be used to collect light, shape it, and focus it at the detector for all infrared bands. In fact, when you look at some of the materials, some of them go down to the visible light. 500.57 nanometers or 570 nanometers is what we know as green light. 61,610 nanometers is red light already.
These materials not only image shortwave, longwave, and midwave, but some of them even image near infrared. They're same night vision goggles or even a little bit of visible light. What does that mean? That means that a payload like this on a drone, on a tank, on a, anywhere might not need three separate cameras here down the road because you're seeing here probably a shortwave camera, a midwave camera, and a visible camera, maybe even sometimes a longwave camera also. If you can now combine those, again, the same analogy is here. The weight, the total size, needing just one detector, the power consumption goes down. All of those things are made possible with those materials.
Our Mantis cameras that is streaming this video feed here in the corner actually is already imaging in both midwave and longwave simultaneously and is made possible because of those materials. You could not design the Mantis camera without the material we call BDNL4. We tried and you just could not get that design done. Okay. Just to talk a little bit about those materials, we licensed nine materials. We have the right for additional materials. One material is in full production already, BDNL4. Two materials are really ready for production. We are just gradually transitioning them as we are building manufacturing capacity. The announcement from China in December threw a bit of a curveball to this plan in terms of a lot of the capacity had to go towards making BD6 glass and the existing BDNL4. It slowed things down a bit.
We're addressing that by throwing more resources into it. BDNL8 and BDNL6 will be available soon. In fact, BDNL8 is already used in two DOD programs where we gave them a sort of initial taste of that and the developer found it. We haven't, again, publicly announced it just because we don't want to disappoint customers with limited capacity on that. We're now ordering more equipment. We're adding more people. We're increasing the capacity. That should get solved. BDNL7 and 9 are, there's a typo there, are in qualifications process. That is a qualification process we're doing in conjunction with the Department of Defense, Defense Logistics Agency, where they are actually bankrolling the process to qualify those materials by out of the need that the market has for them.
Those two materials, BDNL7 and 9, were chosen a bit earlier than the others because the Army had a specific program that needed one of those materials. We put them ahead of the others, but we're very shortly going to get to the rest and then consider whether to license more materials from NRL or not on that. Another type of differentiator that I mentioned, so materials was one. The ability to customize the camera quickly is another one. With the acquisition of Visimid, we added in the capability not only to customize design and customize optical assemblies, but also the video engine or the whole camera core, if you would, behind that. Together with Visimid, we're now able to make complete thermal uncooled cameras beginning to end where we can customize all aspects of this.
This means that a process of development of a camera for a customer means this agile process of multiple iterations where together between the Visimid and Orlando teams, we're able to optimize the form factors, the choice of process, the software, the optics, the system integration, and a complete customization. One example of that is obviously our Lockheed Martin project that Visimid is doing and we'll talk about, as well as other programs that we have where we're developing custom cameras. Okay. That's, I think, it on sort of strategy level and differentiators behind that. Any questions on that part first, or do we do all the questions at the end? At the end.
[crosstalk] Okay. Okay. Jason? Yep. Thank you.
Thank you, Sam. Jason Messerschmidt, VP Global Sales and Marketing.
You know, kind of looking at the engineering of a new LightPath, as Sam was talking about a strategy which actually is, you know, kind of evolving the company up what I would refer to as up the food chain, right? You know, so when Sam and LightPath as a whole, you know, came about, we were talking and selling lenses for a dollar, you know, $2. Very commercialized market that has increased in price pressure and just, you know, all kinds of global competition, right? As we look at the progress, as we go into a LightPath 3.0 state, you know, you're talking differences in ASPs, which is kind of a leading indicator of, you know, the complexity of the product, the value you're supplying to a customer. How much of that overall product program and solution are you actually owning in conjunction with that particular customer?
You're going from just doing lenses, you know, ASPs and the dollars up to maybe $50 or $60. Then you're kind of moving into the second step, the LightPath 2.0 part of it is creating an assembly, right? Maybe multiple lenses, you know, creating a semi-finished product to supply to a customer for them to put into their own particular system. As you get beyond that, that increases the, you know, ASPs, you know, pretty significantly when you're talking compared to a dollar, right? You know, that's a nice jump.
Then you move into where you're doing more of what I would refer to as like a subsystem, you know, where you're capable of supplying the, you know, overall electronics package, customize their specific needs, the optical assembly, you know, giving them the right communication ports, the customization from Visimid, all the core optics from the legacy LightPath, and giving them a full-blown imaging system that, you know, now when we're talking like our furnace cameras, you're talking ASPs up to $30,000. You know, so I have to sell a lot less $30,000 cameras to get to a mark that I want to get to than compared to trying to sell dollar lenses that are just getting competed with everywhere. Those differentiating factors. At the very end, you know, kind of we'll talk about this a little more, much more in depth later.
Now you're talking about the addition of G5 Infrared. You know, that brings a whole nother layer of capabilities because these two capabilities here are very married together in a lot of the applications we'll talk about where there is definitive need for both cooled and uncooled products. You know, maybe it's a cooled camera for something specific and there's four or five uncooled cameras within that same application. Us being able to serve that entire market now with the acquisition of G5 Infrared is an extremely exciting time for all of us. Al?
Hello. I'm Al. I wanted to talk a quick minute about the path, LightPath 1.0 to 3.0. It's not just about product development, although we focused on a technology and a product development.
The entire organization had to be transformed and is still in the process of transforming to just support that vision, that product, the salesforce, and everything else. This is just a few things. It does definitely start with the strategy, but over the last four years, we had to right-size the company. We had five locations, six locations that are now rationalized down to three, although we just added one and two. Now we're back to five, I guess, as of Tuesday. It is a good reason. We de-emphasized our investments in China four years ago, right? That was part of our strategy from the beginning. Geopolitics then took hold. We had issues in China that were related to all the usual China problems, bad management team, fraud, and everything else that had to be done.
The global footprint, the rationalization, and then reorganizing everything for the strategy around that strategy. You have to have a strategy, you have to have an idea where you're going, and then actually everything else has to go with. We even had to downsize the board of directors and even make some changes there, which is not always an easy thing to do, but your board has to be supportive just like we support them and the investment community, right? We sunsetted unrelated products. We just sunsetted, I think, the last of them last week, two weeks ago. We eliminated fraud in China. We've insourced some things and outsourced other things. That should be both ways. From the tour today, you saw some other opportunities that Sam discussed about what we're going to outsource going forward.
Obviously, the acquisition of Visimid and now the acquisition for G5, all on that path to 3.0. As technology-driven as LightPath was in the 1.0 version, we had to accelerate our ability to get to 3.0. Manufacturing back in the U.S. Anybody who's watching, I encourage you to come visit us. You'll understand what manufacturing in the United States looks like. Of course, the NRL technology licenses, the patents that were around that, and the expansion that to the EU is a big part of the overall plan. That started before there was a product, before we tested anything, before DLA gave us a dime, right? You have to follow the strategy there. Of course, now it enables us to do some more of the EU defense work. I did touch on the facilities.
Over the last five years or so, we've invested somewhere north of about $8 million or $9 million, most of it in the United States and in Latvia. The Latvian market or the European market is very favorable, and Latvia is a great footprint to be there with. Of course, the expansion here and reinvesting in the United States. Very popular today, but we started that journey about three years ago. The China facility is half, actually, we had three different sites in China. We're down to one. It is the smallest manufacturing location of all the locations. That ought to give you an idea of where we are with that. Yeah.
Texas is the smallest in the moment where Jason is, but they're very specific, very focused on rapid R&D, rapid prototyping, which then can be launched either to Orlando, Latvia, or in the future, G5 for manufacturing equipment. Of course, there's the facility here, which is now finished and no need to expand it any further. We have plenty of capacity and plenty of room.
Thank you, Al. We will talk, we will expand a little bit more on, you know, where we're focusing, what we believe are our pillars of growth as we change the company. You know, going from that component manufacturing to the assemblies to uncooled cameras to cooled camera applications. You know, we want to target certain areas where we know we have differentiating factors.
We can go in and we can actually, you know, take a problem that a customer has and provide them a solution for it that they're going to find value in. You know, just not just making things to make things, making things for an actual purpose based on the industry and based on, you know, where we feel we can be extremely successful. Optical and camera assemblies is, you know, kind of the groundwork that got us to LightPath 3.0, right? You know, taking multiple lenses, putting it in an assembly, selling it to customers, moving our way up that particular food chain from a $50 lens to a $500 assembly to, you know, multiple thousand dollar assemblies, depending on the complexity of that particular product. You know, we are totally customizable.
What you see in the picture is also our, what I would refer to as an assembly that includes an electronics package, a lens, specifically in this case, designed to be able to visualize gas. This would go out to an integrator, somebody that's going to put it in their own system in probably an ATEX-type enclosure and take it out to an oil and gas site and put it into a video management system to detect methane leaks. That's an uncooled camera with Visimid-based electronics and a specially coated lens from LightPath. I mean, you're getting all the different worlds within that particular product to solve a problem and be able to go out and capture that market share.
Government and defense and aerospace, you know, a lot of this revolves around the cutting-edge materials, the alternatives to germanium, the materials Sam talked about when you're getting into some of this really complex stuff where you can take a 21-element assembly and turn it into a 12-element assembly, putting tools in their toolbox to be able to do more than you can in any of the other commercial or industrial spaces. We are looking for and continue to look at, you know, what I would refer to as new commercial applications, oil and gas plant emissions monitoring. Typically, that has been served by cooled cameras, so cost prohibitive for mass deployment.
You know, all these old oil pads that need to be monitored and other areas, you know, you could do that with an uncooled sensor from us with the right electronics and the right lenses coated the proper way to be able to visualize it. You could put four on a site for half the cost of one cooled camera. You also go back to the conversation from a couple of minutes ago, coupling a cooled camera due to the sensitivity, due to the length of being able to visualize, and add that to an uncooled camera and we can provide an overall solution. Smart city applications, which I'll have Todd talk about in a little bit. You know, security applications, you know, the G5 Infrared camera, being able to turn around and, you know, visualize things from a very long distance.
The uncooled product lineup, our Mantis, which is, you know, streaming in the back and when you rewatch the web version, our high sensitivity camera, less than 15 millikelvin sensitivity, allows us to visualize gas better than any other uncooled camera on the market. Furnace cameras, being able to inspect inside large industrial-type furnaces at extremely high temperatures, 1,500, 2,000 degrees Celsius. EdgeIR, which is our, you know, relationship with Maris Technology, being able to integrate on the edge AI algorithms and our compact suite thermal imaging cameras, our Solo, which is over on the table that you can also see. Mr. Liebert, going to talk to the group about our Lockheed program that Mr. Liebert and his team in Plano is really heading up.
Thanks. I'm Jason Liebert, GM for Visimid.
We happily joined LightPath in July of 2023, so we're glad to be part of the team and contribute here. You know, I think the big part about this to really talk about it, we're excited about this program, that it has huge upside for production. You know, right now we're currently building units that are in DBT. They're going into flight test. They're going into qualifications. We just had a design review with them yesterday that went really well with our Lockheed customer. Really excited about that program. I think what's interesting to talk about is kind of back to Sam's point earlier about our customization and our being a partner to our customers. That's really how we got to this point.
The whole thing started in 2017, 2018 when Lockheed was looking for a solution and they went to the usual suspects to try and get somebody to build something for them. They just could not get, they just could not get the partnership. They could not get the response back from those guys to help them get there. You know, they ended up coming to us and, you know, came to us with the challenge of, "Hey, do you think you could make a sensor that could do these types of things in a package small enough to fit into, you know, something the size of a roll of nickels?" We started off with a PowerPoint.
I was like, "Well, I don't know if we can do it or not." Working with them over several years, we actually developed, built prototype to deliver to them, you know, a solution that they were actually very excited about that they started testing. In the delivery of those prototypes, another division of Lockheed that was pursuing this particular contract saw that, said, "Hey, this looks like a really good application, something that would work for this other application," and then actually took that and used it to integrate, which is really kind of Lockheed's kind of setting up their differentiator for their solution on how we think we're going to beat Raytheon in this endeavor. It all centers around, you know, something that started several years ago.
You know, we still have the original prototypes that we built that hopefully will be, you know, something that we get into production later.
Thank you, sir. We have other existing programs of record. We have multiple areas of programs of record that were, you know, some of which may even have been in production while you were out touring the production floor. You know, different programs that have been in place for, you know, quite a while and also different programs that have come about in the recent, you know, recent past with changes in some of those particular applications, especially the in-space communication is one of the, I believe, one of the coolest ones and where a lot of our products are being utilized. Some key applications in industries, you know, we talked a little bit about the optical gas imaging camera.
You know, you got a, you know, you got a federal mandate through the EPA to, you know, regulate the amount of methane that is leaked into the environment. You know, plus a lot of these, what I would, you know, refer to as super majors are just, you know, good corporate citizens and plus it's just, it's money that's flying out. They want to save that, right? They can very easily literally visualize the, you know, return on investment when they're deploying cameras that can help them keep their leaks under control. Not just from a corporate citizen standpoint or an EPA standpoint, but money back into their pockets that they can utilize to reinvest in other things. Again, typically this has been done with, you know, cooled cameras and it's, you know, kind of limited the amount of resources they're capable of putting at it.
With an uncooled camera that can visualize methane and other VOCs very easily, this is, you know, this is going to be really good for us. It is definitely an industry and a, you know, vertical that we're paying a lot of attention to and moving forward with. Also in the utility market, they have a gas called SF6. When one of these goes bad, it'll leak out and it's extremely bad for the environment. Not as much regulation surrounding it, but it's just, it's really bad for the environment and these companies know it. They spend a lot of money trying to minimalize the effort that it puts into the environment. Right now they're doing it all by handheld devices. They got to send the guy out in a truck, you know.
As we get into this fixed autonomous type monitoring of multiple different kinds of applications, this is where these particular devices become critical. Our furnace applications, you'll see in the back corner there, there's a furnace scope that goes into a big, large industrial furnace, you know, 1,800 degree, 2,000 degree Celsius type environment, be able to visualize the inside of the furnace to be able to see slag buildup. You know, they don't want to shut these things down. These things are 10 stories tall, huge, huge environments. They don't want to shut them down if they don't have to because it's a loss of money, right, when they do that. They also don't want something bad to happen to them. They have to monitor them internally.
Our technology with the, you know, uncooled midwave camera, you know, provides them the ability to put it in multiple different places and be able to see everything they need to see to be able to know that they either need to turn it down for service or, you know, further inspect something down the road. Mr. Todd Croteau is going to come up and talk a little bit about our automotive and smart cities.
Thank you. Good afternoon, Todd Croteau, business development for LightPath. Two opportunities that LightPath has looked into over the last year since I've joined. One is automotive. The other is smart city. If you're familiar with smart city, we'll talk about that in a few minutes. Automotive, NHTSA released the FMVSS, Federal Motor Vehicle Safety Standard number 127, April, March, April of last year. What is that?
It is given the directive to OEMs that they have to stop going forward 65 miles an hour in a certain distance, as well as a certain distance at a certain miles per hour, I believe it's 45 in reverse. How do they do that? They look at the sensor suite that the cars, the manufacturers are using now and say, "You have to do that." I've spoken to lobbyists. I've spoken to the OEMs. I've spoken to LiDAR manufacturers who have LiDAR on the cars now. They seem to think that they can do it with software and the sensors that they have now. Others seem to think that we could use an infrared sensor to help with that. There's a positive and negative. OEMs say, "Please don't make me put another sensor on the car.
It's just going to add another cost." Others say, "It's a good idea. It's just untested." We are talking to everybody in that vertical to see if there is a play. We have a camera with a specific lens that can meet the needs for that. It is just unfounded and untested yet. We are going into that direction. Smart city is another vertical that's very promising. There are a lot of smart city companies that are working with municipalities, states, and countries in regards to gathering technology to help make, I will say, their city smarter and more efficient. We are under contract with a specific smart city manufacturer where we are manufacturing our CST Solo infrared camera to go in a box with two other sensors. They have a deployment that's scheduled in Q3 of this year.
What they do is they take that data stream that comes out of the whole box, either sell it back to the municipality or city, or they parse it out depending on what they're looking for. This will be a first for this company and first for the city that it's being deployed. It's really amazing. We have our first delivery, I believe, at the end of this week and then follow on contract after. If we take a look at the two opportunities, automotive is, I'm going to use the term scary one because it's automotive. Smart city is the exciting one as far as I'm concerned. We are seeing some promise. Thank you very much.
Thank you, Todd.
When you're on your way to, when you're on your way to the cool event that we're going to do tonight, take a look at every intersection that you go to and look up on the, look up on the poles. You'll see cameras, multiple cameras, sometimes multiple sensors, even some radar. Then look at the corner of the intersection. There's always going to be a silver box there. You would be utterly shocked at the amount of technology that goes into every intersection that you drive through. It's quite shocking, to be perfectly honest. I'm going to turn it back over to Sam, talk about our exciting G5 acquisition.
Thank you. Okay, great. Yeah, definitely a very, very important incremental step for us and a group we're excited to have with us and be working together. Lots of great things here.
I mean, the fit into what we call our LightPath 3.0 should be obvious by now in terms of technology, in terms of product. Those here physically can see a demonstration of it. We have a camera set up outside and streaming on the large monitor here. We can see it. Tomorrow, I think we're going to even try and catch some video of a SpaceX launch happening from here with these long-range cameras. G5 located in Hudson, New Hampshire. The location is actually pretty important since a key New Hampshire area for reasons I'm not sure why is a center of infrared optics per se. It's amazing how much of the infrared optics that we make here actually ends up shipping to that area to different customers.
Besides, you know, G5 being a great company and an incredible team with strong products on an amazing growth trajectory, it also gives us a physical presence in an area that's pretty important in this part of our industry. We've talked a number of times by now and you're all fed up of hearing on our growth and transition. But, you know, if we just look at ASPs as an indicator for the complexity of the product we do, to the value we create, to therefore the value we can capture, ASP is a very good indicator, lead indicator to that.
Going from those notorious lenses that have been dropping and dropping in price to the assemblies to uncooled cameras to now adding cooled cameras is a very natural progression in the complexity of the product, the value we're creating and soon to be shown in the financial results, the value we're capturing also long term. The transaction is an upfront payment of $27 million, 25% of it taken in equity by the owner of G5 who are staying on board and part of a, you know, sort of vote of confidence in what we're going and what we're doing in the direction we're going. Earnouts structured over 12 and 24 months simply because G5 is on a great growth trajectory. We think, and the G5 team thinks there's a lot more growth for them to deliver on. We want them to enjoy some of that.
If and when they will deliver on those growth rates, and we're talking here of growth rates of 40-50% a year, there will be an additional earnout there, which one third of the earnout is paid in stock as well. We closed the transaction already, so no need to talk about all of that part. It is a great strategic fit for us. We immediately get a nearly 60% jump in our top line, highly profitable, highly complementary product. We share a lot of the same customers. Actually, most of the customers either side emailed to tell them about the acquisition already worked with the other one in any case. Some great synergies there.
Many of the customers of G5's that buy their cooled cameras and integrate them into large pan tilts, you will see those customers also have smaller pan tilt systems that have uncooled cameras in them. You know, a really great synergy there of that culture as those here present can tell from all the jokes flying around. We already know each other pretty well and the two companies fit very well together. The company is at a growth trajectory. I mean, we'll share in a minute a contract that we literally just won and are about to announce publicly that is one of those. Very exciting times. The combination of the two really positions us in a very unique place in the industry.
In fact, other than FLIR, there's almost no companies out there today that have a combination of offering complete ready-to-use final product of cooled and uncooled cameras. There are sensor companies like Lynred in France that would make both. There are some companies that make modules for cooled and uncooled, but there are very, very few that have that range. As you can imagine, the market we're going after is such that we're building this vertically integrated company to become an industry leader in infrared imaging altogether, period. There's a lot of market there to take and we're very well positioned now both in program, in product, in key technologies like our AI, like G5's ATCOM image processing, and programs of record like our NGSRI, stinger replacement, like the Apache program, and like two big programs of records that G5 already has.
We're positioning ourselves to become at least $55 million in revenue in the next 12 months in terms of top line revenue and growing margins, growing EBITDA numbers as Al will talk about. A range of products all the way from what they call short range, which for uncooled cameras is still long range. When you talk about ranges, you talk in optics world or about DRI, which is the ability to detect a person, meaning you see a little bit of a signal there. There is someone there. Recognize a person, oh, that looks like a person to identify, oh, you know, I can actually see the exact person. The ranges get calculated by as a function of the optics, the resolution, and so on.
You're talking about this industry leader, and this is by far the leader here, can detect a human person by as far as 37 kilometers away. That's just crazy numbers. To show what that actually means in real life, this is an airport seven and a half miles away taken with this camera. It's 785. In theory, the 785 should be able to identify, again, identification is this image on the right, identify a person from eight kilometers away, roughly. Here you see a person in this image. We cut it out here. It's seven and a half miles clearly identified. These cameras really do deliver up to the cutting edge, the theoretical limits of detecting and identifying people or vehicles or ships or drones or you name it. Everyone has a calculation to it from extreme ranges.
As a result, G5 has installations that are in Border Patrol, now in Navy, in Counter UAS, in key facility protections, prison systems, power plants, and more and more. That list is just growing and growing. Another technology G5 has, similar to our AI technology embedded in the camera, G5 embeds what it calls an ATCOM image enhancement technology. You can see it here in this image where the ATCOM is applied to the square in the middle. You can see just how sharp this image at 6 mi away is compared to the edges of the image. If you look at the vehicle in the top right corner here, blurred versus the vehicles here inside with the stabilization, motion compensation, and lathe. Some of it is also turbulence mitigation.
When you're imaging something that's that far out, even smaller wind gusts and change in temperature in the air causes turbulence and impacts the image. Currently, G5 focuses on three main areas or has been until now. That is long range detection as in Border Patrol, Naval as the programs that we just got awarded, and surveillance in general. Together with our sales team and Jason here that came from FLIR and has been bringing his collaborators from FLIR slowly over, we believe there's much more for us to grow into. Counter UAS is a big one, critical infrastructure, gas sensing. LightPath already has one camera there. There's a G5 camera being developed that will be complementary to it. Multi-spectral imaging that could be done with our unique materials, integrating our AI and so on and so on. Lots and lots of synergies there.
Strong synergies on sales and marketing, strong synergies on growth, operational also, in sourcing the components that G5 currently outsources, making them at LightPath, using our materials instead of germanium, some redundancy in operational support and such, but not huge. G5 is a very lean organization. Then lots of technology synergies in the different differentiators that both companies have developed over the years and that now will work together on both platforms of cooled and uncooled. As an example, this is a cross-section of a G5 camera. All these lenses in here, all these parts will be able to be sourced now internally within LightPath down the road.
We're not pushing on doing that on day one because, again, the main driver for the acquisition is the growth, is the growth of both companies, is the portfolio, is the materials, but there are also cost savings synergies down the road. Lots of great customers for G5. I mean, pretty much who's who in anyone that uses these types of cameras. And two programs, maybe Mike, if we can put you on the spot to quickly talk about them. Yeah, you should hold this thing if you're going to talk.
Nothing like an introduction to.
Yes
Micah Morelli from G5. So the slide up on the screen and you're viewing right now is, which one is the CTSE? Okay, so this is a DHS Border Patrol program.
It's gone through several name changes and iterations over the years, but it has whittled down to the three primes that are legally have received IDIQ contracts to deliver hardware for the border on this program. We are partnered with Elbit North America, who is the incumbent in the fielded systems prior to the CTSE program that was called IFT. They delivered back in 2012, they were awarded a contract for 50 tower systems that were the most technologically advanced border security systems ever deployed by DHS. The CTSE program is basically a follow-on to that. They've combined technologies from several different programs into the CTSE program. One of the biggest differentiators for this program is intended to be autonomous. They're trying to take the man out of the loop.
IOIs, objects of they try to identify people, targets, vehicle targets, all with software, and then decisions made whether to engage, you know, DHS folks as well at that point. Right now we have just finished, we are finishing delivering our first LRIP units into the field for deployment. They are planning, DHS is trying to catch up on a delivery schedule that they're a little bit behind on. We hope to see more awards later in Q3. That pretty much sums it up there. Okay, yes, yes. This next slide here is a Navy program called SPEAR, Shipboard Panoramic Electro-Optic Infrared System. It is an L3Harris product that is going to be eventually deployed on all of the large vessels in the Navy.
We were originally awarded a design, a $1 million design contract to take one of our standard products, optimize it for the application. We just received the first order for seven units to be used for qualification and testing and initial deployments. This is a program of record. It has a lot of legs going out into the future. This is definitely one of those products that is on the high end of the ASP scale that you've seen. It is great to be on a product like this that's going to have a long life. Considering I didn't have any planning, that's it. Thanks. The SPEAR program is a flagship program for the Navy in terms of protection of vessels against UAVs, against small vessels, small marine vessels, against cruise missiles also. It is a pretty big deal.
In fact, there's talk already on the next generation of SPEAR by the Navy, which is already designing using our NOL materials. Even before the acquisition, we were already sort of in the same boat, no pun intended. Now this really puts us, you know, combines our key technologies together in a way I know the Navy is extremely excited about. It's not the only thing, and G5 has other programs of record which are continuous. For example, the urban warfare training centers, ICE Stalker system on aircraft carriers with FAA, ongoing repairs and replacements of cameras on NOLVIASS towers, and multiple prison security systems around the world. Those are just a taste of it, but each one of those are ongoing programs, and each one of them is, you know, alone in the $1 million-$2 million a year for G5, for G5.
Okay, now the numbers. There you go. All right, so I guess first comment about a large bulk of the financing was done through conventional preferred. Northrun is the lead investor on that. They really are a fundamental long-term investor, right? Sam and I were very skittish about this entire preferred convertible approach, but I think we found the right partner. Northrun will have a board seat. You know, they'll be on the board for up to five years. They really are a participant. This is a seasoned group who have sort of decided to use their own money, create their own investment firm, and do it sort of the way they've always wanted to do without being beholden to individual investors so that they can take a long-term view. We're only the third public company that they've done this with, right?
They have been very selective over the last three years. Literally one a year, very pointed, very selective. We did get initial feedback about whether or not it's toxic. It's not, it's as not as not can be in today's environment. For those of you who've been around a few years, it's how they used to be before they became toxic. We took a while, you know, on sort of negotiating the terms to get it where it is. Just the features of it. I'm not going to read it to you. The next one's an eye chart, so I will read it. Around the deal structure, it's $25 million, the convertible preferred is $25.5 million. The unit conversion price is $2.20, right? The per share is $2.15 plus, you know, the $0.05 on the warrant.
There's 37.5% warrant coverage struck at $2.58, right? 6.5% interest. We have a pick option on the interest. We could pay it in cash or obviously shares. There's a mandatory conversion provision after three years and then redemption provision after five years. All right. Those were two things we were very strong about. The ability to get it out. Yep. The promissory note is $5.3 million. If you recall, we had a note for $3 million. So we took that note out and that note had been rolled into this whole entire transaction. That's why we're saying $4 million of it is new money. $1.3 million is a rollover from the old $3 million note. It's 10% interest as long as we maintain our covenants. If we break the covenants, it goes up to 12%. And it's pretty standard bank covenant type stuff, nothing unusual in there.
It's a two-year term, so it's not intended to be permanent, but it is intended to bridge us. We did a small piece of equity, $1.5 million. $500,000 is new money at $2.15, no warrants. $1 million rolled in from the existing note. It's the promissory note that we had $3 million in place with the same terms as the convertible preferred. Like I said, Northrun Capital plus two already existing investors are the contributors to the entire thing. In total, we brought in $2.9 million in cash. Walk away after a transaction is $6.7 million. We don't have to invest CapEx. If you're on a tour today, you heard me say that 50 times. Some of these programs, particularly SPEAR and some others, are going to start kicking off. We do need working capital for those, right?
The lead times between, you know, ordering materials and actually delivering can be quite lengthy. There is a mandatory conversion price that's a little repetitive here. Optional redemption period from LightPath or Northrun after five years. Northrun's on the board. And while Northrun's on the board, they've also agreed to a no short provision, which makes sense, right? In terms of shares, that's the actual share count, how all of this converts. So it's $600,000 in equity, $1.9 million, almost $2 million to the sellers, $11 million in preferred, and it's hard to read that, $4.5 million in preferred warrants. Talking a little bit, this is not guidance. Not guidance, all right? Let's talk a little bit about what our expectations are. We have pretty robust models that we built, sort of worst case, best case, better case, fantastic case, right? We modeled it out here.
The base case is built. The base case is sort of this little blue bar here. That is built on what we think the two companies would do in normal organic year-over-year growth, being a little aggressive in the market, bringing some new products to market, but nothing over the top, right? We call that the base case. It has high probability opportunities that are not $10 million and $15 million per year, not those kinds of things, right? That is what the business case is built on. That is what the price around G5 was built on as well. The next little category is high probability opportunities. This is something like the base case plus Apache. We know we are on Apache. We know it is going to happen, you know, high probability it will happen. We built it into that.
That top band is when we start seeing things where the Lockheed Martin program wins and you've got a $10 million a year event. The SPEAR program wins and you've got a $10 million a year event. It's not two, it's 10, right? Those kinds of things. It is entirely possible that we could hit those large opportunities in the long run, but we build everything around basically this line. This line, we're right there, all the economic models to warrant it. The earn-out for the sellers is based on, of course, doing much better than that, right? All right, last numbers on G5 itself. At the end of 2024, still unaudited, we'll have it any day now. They did $15.1 million in sales. They had $5.7 million in gross profit, 37.8% gross margin. $5.6 million in expenses, G&A expenses, and an adjusted EBITDA number of $1.2 million or 7.9%.
We are targeting a 20% growth for them. However, the earn-out is at 21. Starts at 21. And Mike is one of the G5 folks. They have a high level of confidence they'll do that 21, which is obviously a lot more than 20% year-over-year growth for them. The cost of goods have no synergies in the assumptions. Sam just did the 3D cross-section of what the camera looked like. We do think we can reduce the cost of raw materials, cost of components, and even maybe simplify some of the optical designs. It is not at the top of the list of things to do. That is a one, two-year kind of plan. There are opportunities there. The gross margin expectation is 35-45%. This is pretty important.
They're going to have to be somewhere in the center of that range to make the EBITDA target of 20%. Your earn-out is gated on 20% EBITDA. It does not matter what the revenue number is, right? The first stage is 21. At $21 million and 20% EBITDA, they earn. At $21 million and 18% EBITDA, no earn-out. In order to get there, they're going to have to do 40% margins at least. G&A expenses, there's an opportunity for some cost reduction there. As Sam said, they run so lean, I do not imagine that it's going to be significant amounts of money. It is certainly not our focus at all. In fact, we're hoping Mike and the team grow real big and the cost of sales and the G&A expenses are a lot higher next year, but to the positive, not to the negative, right?
This is really not a cost downplay. It's one of those unique situations where it's really not. At the same time, it doesn't require heavy lifting and heavy investment other than working capital for us. Their footprint is good, their CapEx is set, and they're good. The EBITDA target is 17-22% for the next fiscal year. Obviously, we've talked about the earn-out being at 20%. It's entirely possible that they could earn, you know, their earn-out and then some. It's not, you know, they pick the numbers. Their confidence level is high. It's a good acquisition. It's accretive in every element. We financed it as carefully as you can in the scenario that we're in, you know.
Thanks, AI. Okay, very quickly before we break to Q&A, we often get asked how to measure success in 2025.
I translate that into what to look out for. What should one pay attention to in order to see if we're on plan or not on plan, how we're doing versus it? Of course, we're expecting an accelerated revenue growth, cost selling of G5 products, putting Jason and his team on the spot. You know, there's a lot of expectations there that the two teams can help each other quite a bit in cost selling. ASPs will naturally grow as we go down that path. Anyone that monitors those in our queues will be able to see it. We cannot guarantee if Lockheed will win or not win, but we will have progress with Lockheed. Now, just as a reminder, in addition to the large NGSI program with Lockheed, we already know that they're integrating our camera solution into at least two more platforms.
We will have some announcements around some level of progress. It could be, you know, test results. It could be new programs. It could be, you know, shipments of flight units and so on. We will try and, within reason, without tipping the hand for the competition, provide updates about how we're doing with that program. Of course, it's a competitive bid, so we have to be very cautious there. We absolutely expect more defense contract wins and specifically also more wins around BlackDiamond. We will be trying to share them, even if they're not significant to the level of material, even if it's only a $500,000 contract or so on. If it's a design win where we switch a customer over from Germania to BlackDiamond, we will try and share those as much as we can. Our EBITDA turning positive already.
We expect it within 2025 to grow to a point of 10+%. We know our ultimate goal there also. Keep an eye out on new camera products, both uncooled cameras and cooled cameras. We will be sharing some announcements. Keep in mind many of the press releases we issue are designed towards our customers first. They might not have the information financial investors want in them because sometimes they are just to drive sales. Reach out and we are happy to discuss with investors as possible, whatever we can. I think with that, we can do Q&A.
Yep. I will just say back to it on GC with your labor business journal. First off, thanks for having me here. It is very informative and kind of cleaned up on, you know, a lot that really stood out.
As you look ahead to the year ahead, is there any, you know, with the acquisition that happened with G5, does it have anything to do with growth in the workforce? Is it going to be more, you know, hands-on decking to be? What do those numbers look like? And, you know, how soon do you feel that those might be rolled out in terms of new jobs and things like that?
Yeah, absolutely. Thank you. The question was for those online, I'll repeat it, was with the growth we're seeing, what are our expectations on growth in the workforce, hands-on deck, recruiting, and so on? I'd say the answer is, in general, absolutely yes.
I'd say in all of the three locations, I'm actually pretty excited to be able to talk about our U.S. side now as being the largest part of the business after the G5 acquisition, you know, very, very different to what the company was only a few years ago. All three locations have open positions of recruiting, have needs for technical people. Orlando specifically, where the heavier manufacturing part is done, we have multiple positions for assemblers, technicians, operators, process engineers, you name it. We have some great partnerships, Valencia College here in Orlando. We're tied in with them. They have an incredible program they put together, what, two, three years ago? Not even, right? Yep. For workforce development, sponsored by Americom, with money coming out of DOD IBAS for workforce development. We're seeing the results. We're already hiring out of there.
We're right next door to UCF, so we tap that as much as we can and always have a few interns floating around from UCF and positions for that. Absolutely expect the growth. You know, it's a bit better now to recruit than it was a couple of years ago. Two years ago was pretty much a nightmare. I'm happy that the unemployment rate is low, but I'd rather see more candidates and more employees if possible.
Sam, given the complimentary nature of this product, are you already out there doing marketing together, or is that a process that takes three months, six months to kind of put together? Okay. The question for those online was given the complimentary product sets that we out there marketing together. The answer is yes. We're already there.
In fact, the day after we announced acquisition, before we even closed, we already had our oil and gas camera sales guy on the phone with G5 learning about the gas cameras that they're developing and helping to accelerate some of the testing there and some of the qualification of it because we're going through that with our uncooled gas camera. I can tell you these guys are stomping at the bit to go out and start selling these products. Jason came to the due diligence of G5, I think, on your second week at LightPath, and you could see the spark in his eye, like to be able to sell those kinds of products. He couldn't wait for it. The team is out there already. We're creating marketing material.
We're, you know, doing websites, but we're already combining forces in trade shows, in customers, our offices abroad, and so on.
Yeah, a very detailed one. Yeah. So 36 to 90, six months, 12 months, and even 24 months. Sales and marketing coming together is the 30-90 day type stuff. Day one activity types of people are in HR, right? So we do have detailed time. Yeah. Yeah, with the G5 program direct, it looks like it might be up for six of them. Is there any doctor deck that lays out the kind of timeline of when those are going to be awarded and who they're competing against?
Yeah, so all of those are already awarded, the ones that we talked about. The Border Patrol was awarded last month in January, right? And the first camera shipped out.
Actually, it was December.
December. Okay. Yeah.
The Naval Spare Program is today, actually. It is fresh news. We need to issue a press release on that. That came already with a purchase order of, what, $2 million? $2 million roughly or just over $2 million?
Yeah, just over $2 million.
$2.8 million roughly. We will have that in the press release. The other programs, you know, things like RVSS, ICELCO, those are ongoing. They have been in there for two, three years at least in some of them, right?
[crosstalk] Yeah. Yeah. Yeah. Oh, okay. I thought that was all of it. Maybe one more needs to be awarded still. Yeah. Yeah. Okay. Yeah. Yep. Jim. Thanks. Sure.
The only thing we have seen until now, the question was given the turmoil in Washington, budget cuts and so on, are we seeing any impact?
So far, the only impact we saw was as of yesterday, Commerce Department put a pause on any export licenses and said we're not, no export licenses are being issued right now. I'm assuming that's more of an alignment thing rather than a policy. We'd be shooting ourselves in the foot if we no longer export anything. Other than that, we have not seen anything. We actually welcome some of those things. In many cases, we find that we move much faster than the DOD administration or acquisition processes can move, and it frustrates us a lot of times. You know, new players like Anduril and companies like that, we love working with them. They move at our pace, and we can finally do things quickly and not measure things in months and not years. Other than that, we haven't seen any direct impact to us yet.
[crosstalk] G5 goes fast. Anything that needs to go faster than it does? Piece of. Yeah. We're in a good spot. Yeah. We're usually way down. Building on that, the new administration has looked over towards potentially Russia to be a peace deal with Ukraine. All this time, I'm finding that the new market opened back up and people said, "Oh, this is the new regime and we're going to." Yeah.
Okay. The question for those online was given the new administration is, you know, warming up towards Russia, ending the conflict in Ukraine, would that affect the Germanium situation and all our investment? I think the Germanium was a wake-up call to everyone.
I mean, even if tomorrow morning germanium is available, some people will breathe a sigh of relief, will take it, but, you know, the damage is there sort of in terms of, you know, people understanding the vulnerability and the risks related to that. Now, the U.S. and others are working on developing germanium supply chains, and we welcome that because our materials are not a 100% alternative. You need, again, back to the example of the optical designer that has in his toolkit 20 glasses now instead of 10. Those are needed. I mean, and those are the things. What we want is to reduce the dependency and not be at the point where, you know, it can be shut down completely. I'm not worried about that.
I think maybe there will be some that will go back to it, but for most people, it was a big wake-up call. We did a lot of Germanium optics before. As much as 30% of our infrared optics was Germanium optics, and it was, you know, not the most profitable business, but it's good business because we know how to handle Germanium. We cut that down drastically to 10%, but we have the capacity. If Germanium is available, we ourselves might take some Germanium work on again. Ultimately, our goal is to, you know, leverage this to get our customers to understand the advantages of switching over.
Yeah. If anything, it actually hurts to think about the macroeconomics behind it. It's just a little bit of it, the spigot gets turned on, and we become less dependent on trying to dozen services.
It's still being high priced, and it's still being not going like it used to. As Sam said, you still have to have it next year. You're not producing enough in Russia. It's just a little bit better, but not a little bit. Yeah. Thanks. Question probably for both Sam and Jason. This probably goes across LightPath and G5 independently as well as as you come together. You talked about FLIR being kind of the big dog in the central red market. Yeah. Really an opportunity to be kind of the second leader here. I'd love to get a perspective, maybe more so from Jason given his long history here. What are the strategies to make LightPath kind of the premier and only alternative to FLIR?
Are there any structural obstacles to, you know, any sort of rapid, you know, emergence into that market to be the alternative to FLIR in any way? What does this apply across LightPath?
I think some of it, you know, I'll repeat the question just so the people online, you know, is there strategic roadmapping? Is there hindrances to us going out and garnishing a certain portion of the available market from some of the larger industry leaders? How do we, you know, kind of portray that? First of all, I think it's don't bite off more than we can chew, right? You know, pick three or four verticals that are meaningful to us where we have differentiated product. You know, a lot of the larger manufacturers want to just manage in volume. They want to pump out a thousand or something.
They don't necessarily care about the guy that needs a couple hundred because that guy needs it tweaked or with a certain coded lens or a certain type of communication port that we could do through our Visimid. You know, we're not trying to solve every problem, right? Because that would be we just don't have the resources for it. That's not a way to ingrain ourselves into the market. Some of it is built on relationships, you know, that I and my sales team have, you know, relationships that are, you know, long in the industry of trust, of being able to produce something for them that really solves their problems. They want somebody to deal with.
They want somebody to come in and shake their hand, go out to the end customer with them, understand the end customer's problem, you know, and not just be a very transactional type environment. You know, they want to do something that's meaningful for them, meaningful for their customers, differentiates them, differentiates us. You know, that's why we kind of showed those pillars, right? You know, we're going after two or three or four areas where we want to get really, really good at and then expand on those with those particular customers. Because in the commercial and industrial spaces, a lot of those are the same customer, right? A lot of those are the same integrator that we're going after that may service an optical gas imaging, you know, environment. Also may, you know, do FLIR stack monitoring.
They may do some type of automation for industrial high process temperature monitoring and those types of things. You get in on the ground, you help them differentiate themselves, making them be able to be competitive against their competitors, solve a problem for the end user, and then just continue to build on that with our product stack. You know, being able to be nimble is a huge part of that. Being able to just go to our Plano office, sit down with our engineers and say, "This is what the industry needs. This is what they're looking for. This will help solve their problems." Being the guy that has that and actually wants to listen to their input puts us in a great position. You're not going to buy our product on amazon.com.
Like that's not, that's certainly not the, you know, that's not the product offering that we're going after today. You know, we're going after what I believe is an underserved portion of the, you know, underserved portion of the market, you know, where they're not getting everything they need to solve their problem. They're attempting to deal with it the best they can with an off-the-shelf solution. That's an entry point for sure. Absolutely. Yep. For sure. You know, that's later down the road. That's part of a longer-term strategy, you know, building the company where there's a whole bunch more commas on the screen that me, Al, and Sam can talk about. We're starting where we know we can get that really good growth, get our practices down properly, make a great name for ourselves, and deliver value to our customers. Thank you.
Thank you. Please. I guess you define the broader strategy here as you're sort of moving up market to be like that mid-tier systems integrator, like a FLIR or like a Lynred or TRS. Yep. Where you're able to pair the optic with, you know, the thermal camera core and the actual AI chip to do the onboard processing. Yeah.
Yeah. To repeat that, the question is are we moving into sort of more mid-market where we're pairing the optics, the camera, and the AI, and that's exactly it. To, you know, supplement the previous question, which ties into that, there is no need immediately for a me-too company. There is no need for someone to come out with another camera that's identical to the FLIR camera and just, you know, have another vendor there. Yeah, there might be some of that.
But an entry point is really coming in into where are the gaps, where are things missing? You know, a market of furnace cameras to be able to offer these furnace cameras at $30,000 instead of $120,000, you know, you're creating a value to the customer because with the same budget, he can buy four of those. And as Jason showed, look at three different places in the same power plant simultaneously. You know, it's finding those areas where we create real value there. That opens the door. Down the road, sure, we are going to have the, you know, bread and butter cameras and the ones that will be just repeating and in volume, but it's not the starting point. Okay. Any questions from online, or is that not an option? Okay. I think we're about. Okay. Do you want to?
Thank you, everyone.
That concludes the.