Precision Optics at Lytham Summit: Strategic Growth and Market Expansion

Precision Optics Corporation (NASDAQ:POCI) presented a strategic overview at the Lytham Partners Consumer & Technology Summit on Tuesday, 19 August 2025. The company highlighted its focus on micro optics and digital imaging technologies, emphasizing applications in medical devices and defense aerospace. While Precision Optics aims to expand its product lines and manufacturing capabilities, it also faces challenges in transitioning from engineering to production.

Key Takeaways

• Precision Optics plans to launch 2 to 3 new products annually, focusing on single-use endoscopes.
• The company is consolidating its manufacturing in Massachusetts to enhance production and talent acquisition.
• Valens Semiconductor aims for significant revenue growth, targeting $200 million to $300 million by 2029.
• Both companies emphasized the importance of strategic partnerships and technological advancements.

Financial Results

• Precision Optics reported that 60-70% of its revenue is derived from the medical device market, with the remainder from defense aerospace.
• Valens Semiconductor’s revenue for the first half of 2025 was $33.9 million, with a cash balance of $102 million at the end of Q2.

Operational Updates

• Precision Optics is moving its headquarters to Littleton, Massachusetts, and relocating its Maine facility to South Portland to boost manufacturing.
• Valens Semiconductor has sold over 40 million chipsets and holds 125 patents, underscoring its technological prowess.

Future Outlook

• Precision Optics aims to grow by increasing its production capabilities and launching new products in the medical and defense sectors.
• Valens Semiconductor is exploring opportunities in the automotive market, with a focus on ADAS and autonomous driving systems, and plans to expand into the single-use endoscopy market.

Q&A Highlights

• Joe Forkey, CEO of Precision Optics, emphasized the company’s commitment to customer engagement from the design phase through to manufacturing, ensuring IP retention.
• Guy Natanzon, CFO of Valens Semiconductor, highlighted the strategic partnership with Mobileye and the goal of achieving significant revenue growth by 2029.

For a comprehensive understanding of the discussions and strategic insights shared during the conference, please refer to the full transcript below.

Full transcript - Lytham Partners Consumer & Technology Summit:

Robert Blum, Managing Partner, Lithium Partners: Alright. Hello, and welcome to the Precision Optics fireside chat. My name is Robert Blum, managing partner here at Lithium Partners. And today, I’ll be moderating a q and a discussion with Joe Forkey, the chief executive officer at Precision Optics. As a reminder, Precision Optics trades under the ticker POCI on the Nasdaq.

Alright, Joe. Welcome.

Joe Forkey, Chief Executive Officer, Precision Optics: Thanks, Robert. Nice to be here.

Robert Blum, Managing Partner, Lithium Partners: Alright. Let’s, well, a couple of things. I I just wanna point out at the beginning here. I know you’re right in the middle of, preparing your year end financials, so I don’t wanna get into any specificity as it relates to, to to q four or or the year end. So, you let’s sort of use today’s time to really focus on technology markets, high level overview of the company, maybe some of your end markets there in particular.

Just a disclaimer upfront here. So again, for those maybe new to the company, give us a little bit of an overview on the on really the company’s mission and and maybe how things have evolved over the history of the company here.

Joe Forkey, Chief Executive Officer, Precision Optics: Sure. Yeah. So from a high level, the company is, as the name implies, an optics company. So we’re a technology company. Everything we do has something to do with optics.

We’ve been in business for over forty years. We were founded in 1982. Recently, over the last five or six years, we made two acquisitions, one of a company called Ross Optical, another of a company called Lighthouse Imaging. They also fit into the same category of working in the optics industry and in technology. Both of those companies were also founded in the 1980s.

We have a long history in this company of being involved in the marketplace and developing next generation technological solutions to challenges in a number of different fields. Over the years, we worked in a number of different areas. We worked in defense, we worked in aerospace, we’ve worked in consumer a bit, telecommunications. Through our entire history, we’ve worked in medical device. And that’s really the main area we focus on.

Today, about 60% of our revenue comes from the medical device market, 60% to 70%. Most of the rest of it, the other 30% to 40%, is in defense aerospace. And we’re seeing some of those things adjust a little bit depending on where we see the near term demand for the kinds of technology we have. Very briefly, as I say, we’re an optics company, a technology company. Optics is a very broad field.

We focus on three specific areas from a technology standpoint. One is micro optics. We make some of the very smallest optics in the world. The second is in ultra precision optics. We make some of the highest resolution imaging systems for small sizes.

And then the third area is a little bit broader. It’s digital imaging. This is an area that really piggybacks on top of all the developments that have been developed for consumer electronics to make the cameras and cell phones and laptops and such. We take that technology, combine it with our own, and are able to make digital imaging systems for medical devices and, to some extent, defense aerospace. Our business model is relatively straightforward.

We have this core technology that we own. We show this technology to the customers of ours, places where we think this technology could have use, could enable the next generation products. If our customers and we agree that our technology could be useful, we contract with them generally on a time and materials basis to do the engineering work that’s required to take our technology and turn it into a product design and to set up the manufacturing line. Importantly, we maintain ownership and control of the IP as we go through that process, even though we get paid to do the engineering work. Once the product is developed and goes into production, we’re the manufacturer of that product for our customer.

The company will grow and has started to grow through the movement of more and more of these programs through the engineering pipeline, the product development pipeline, and into production. We have two major programs that went into production in the last twelve months or so. One’s in the defense aerospace area, the other is in medical device. It’s a single use endoscope. Both of those are growing very quickly and helping to boost the top line revenue of the company.

We expect to have two to three programs move from the engineering pipeline That’s our goal. And so with that kind of throughput, we expect the company to grow quite substantially over the next few years.

Robert Blum, Managing Partner, Lithium Partners: I want to come back to a word you just said here, core technology. We leverage our core technology you know, and showcase, I think was maybe the word, to utilize to your customers. Talk about what it is that the core technology you believe of precision optics is. What is it that you do that better or anyone else or very few people in the world?

Joe Forkey, Chief Executive Officer, Precision Optics: Yeah. So there’s really those three areas, the micro optics, the ultra precision, and the digital imaging. Let me talk about them each just briefly, and then we can go into some of them more specifically with some of the products we’re making today. Micro precision optics are very, very small optics and complete imaging system designs or sometimes laser communication system designs that rely on our ability to make very, very small optics and design with those small optics into entire systems. So when I say small, we’re talking about lenses that can get as small as under a millimeter.

We’ve made what we believe is the smallest right angle prism in the world, which is about 50 microns. That’s five zero microns. And just to give people a sense of that, that’s about the width of a human hair. So we’re talking about making very small optics that are as small as the width of a human hair. These can be built up into entire designs that have a lot of application in medical endoscopy.

So one of the endoscopes that we make with these very small optics is about half a millimeter in diameter, and it can go through blood vessels in the body. We make a particular product that goes through blood vessels and goes up into the beating heart in order for the surgeon to be able to look at the inside wall of the beating heart. This is a great example of the kinds of enabling technology that we have. You can’t make an endoscope like that unless you can manufacture and design with these very small optics. You can’t do the procedure that relies on going through the blood vessel unless you have an endoscope that’s small enough.

It’s not a case, there are some endoscopic procedures taking out gallbladders and such, where those are done with five millimeter or 10 millimeter endoscopes. Making those endoscopes smaller will give you a smaller scar so that your bikini line looks better. But we’re talking about places where the small size, the really extreme micro size of what we’re doing really enables procedures that just couldn’t be done before, like going through a blood vessel with an endoscope. On the ultra precision side of things, this is a technology that grew out of our work that we did some twenty years ago with Intuitive Surgical developing the three d endoscope that they needed for their robotic system at the time. We did the very first one for them.

And this has continued, we’ve continued to develop this technology. We’ve broadened it a little bit to go beyond three d endoscopes to ultra high precision endoscopes. And basically what we’re talking about here is making systems predominantly in the medical device imaging space endoscopes, although there are some other places in defense where we can use this. But basically, it’s designing systems that are diffraction limited. And we combine this a little bit with the micro optics.

So we’re not only making imaging systems that have very, very good resolution, we’re making those systems in a very small package. So when you combine those two things together, that makes us very unique to be able to make diffraction limited imaging systems in a package that’s very, very small. And then the third area is in the area of digital imaging. This is really coming out of, as I said before, the digital imaging sensors that were developed for consumer electronics. We’re taking those and using those and encapsulating them and designing them into systems that can be used for medical devices.

While the core silicon technology may be the same, the way you package that into a system and combine that with all the other elements to make it viable for a medical device is very unique. One of the acquisitions that we made of Lighthouse Imaging was really to combine the technology they had in the digital image signal processing for medical devices with the technology that POC already had on their front end optics of designing great imaging optical lenses and working with fiber optics to be able to bring light into the body. At the end of the day, the kinds of endoscopes we can make with these digital imaging systems are pushing the envelope in terms of what’s possible with next generation endoscopes. There’s a lot of interest in single use, where the price point comes down dramatically because we’re using these silicon chips. What we do that’s unique is we do the entire imaging system.

So through this acquisition, we now have the full complement of technical requirements in house in order to be able to design the entire video chain, from the wall plug that goes into the wall to the LEDs and the fiber optics that bring the light into the body, to the optical objective, and then the CMOS sensor, and then the wires that come out the back, and the circuit boards that process those images all the way to the HDMI cable that goes into the screen in the OR. That’s very unique to have one company that can manage all the optical pieces, the electrical pieces, the mechanical pieces, the optoelectronics, the optomechanics, the systems engineering, and doing it all in a way that satisfies the regulatory requirements for the FDA.

Robert Blum, Managing Partner, Lithium Partners: So as you’re developing these new products, talk about the process by which you start at the very early stage, right? Mean, it’s you know, medical devices are one aerospace defense is another. Maybe we’ll get to that here shortly. Yeah. You’re you’re working at the very early stages, the design, how you can take the design and turn it into actually a functioning product, which I know is always a is a challenge.

Talk about the length of time it takes, you know, how you’re approached by customers, what those conversations sort of look like, the back and forth. I think you’ve got more than half a dozen programs that are sort of in production right now on the medical device side. Talk about sort of that entire process, the length of time. And you mentioned wanting to have, I think it was two to three new products in production each year. Just help us understand that whole process there.

Joe Forkey, Chief Executive Officer, Precision Optics: Yeah, sure. So our ideal customer comes to us when they’re in what we call the conception phase, where they know they need an imaging system, they know what they want the imaging system to do, But typically, our customers don’t have an in house optics capability. This is true of most medical device companies and also most defense aerospace companies. Optics is a very specific niche with folks who have very specific training and experience. So our ideal customer comes to us right at the beginning of their development phase.

Sometimes customers will come to us because they’re unhappy with another supplier and will take what they’ve already done. But oftentimes, we have to back up a little bit to get a design that will be practical. But they’ll come to us, they’ll show us what they need. We’ll be at a trade show and we’ll show them some demos, and that generate some thoughts about how they could use a very small endoscope in a particular place. So they come to us at the very early stage.

We put together a proposal for the various stages that we need to go through in order to get the design done. So those stages, from a very high level, are starting with what we call minimum viable prototype. So this is really defining the specifications, taking what our customer says they need, and turning it into hard optical and mechanical and electrical interface specifications. And then building some very quick and simple demo system that they can use to validate on the bench or maybe in an animal lab whether what they’re trying to do will actually work the way they think it will. So that’s the first stage.

The second stage is putting together what we call an alpha prototype. This is a prototype that we can build relatively quickly that will have all of the critical functionally relevant specifications. So again, our customer can go and confirm that it’s going to work the way they want it to. Then they’ll come back, they’ll sometimes modify things a little bit. We want to change this spec, that spec.

We’ll go into the beta phase prototype. The beta phase prototype is intended to be exactly like the actual product will be. So that’s the third phase. And then we go from there through a transfer phase where we, assuming everything goes well with the beta prototype, then we will design and build the tools and fixtures. We’re sort of doing that all the way through because a big part of our IP is around the way that we build the product once we get into production.

There’s always design for manufacture for the micro optics is really designed for feasibility because some of these things are so small, a lot of companies wouldn’t even know how to handle them. So after the beta phase, we go through the transfer phase where we actually fabricate, build, validate the tools and fixtures and prove out the manufacturing process, and then we go into full blown manufacturing. This whole process historically would take somewhere around two to three years. Depends a little bit on the complexity of the product. Our customers always want us to do it faster.

We always want to do it faster, right? And because we do it on a time and materials basis, we’ll give them a quote right at the beginning for what we think the whole thing will cost. But then typically, our customer will give us orders as we go for each one of these different phases, and we’ll update the quote and the expected total cost as we go through that. We introduced into the marketplace just six or seven months ago a new approach that we’ve been working on for over a year. And this is a product approach that we call our Unity platform.

And basically the idea here is that we’ve taken everything that we’ve learned over the last ten years, designing and building many this is really for very small endoscopes, digital imaging endoscopes. And for that part of the market, what we found is that as we design new products for our customers, every product is gonna be different. Because they’re going to a different place in the body, they have different requirements for video speed, or video size, or the image they’re going for. But what we found is that there are 80 or 90% of the inside of the products are very similar for all of the products that we’re making in the digital imaging space. And so what we’ve done is we’ve taken all the best pieces from all the products that we’ve made over the last ten years or so.

And we’ve rolled them into what we call this platform, the Unity platform. We have a couple of different platforms that are targeted towards different size endoscopes. And what we can do now is we can start with that platform design. So now when a customer comes to us and says they need a product that does all these different things, we can set up the different specifications. Many of those will be satisfied by this core design.

Now we’ll always have to change the interface specs for the size of the endoscope and the diameter of the endoscope and the length of the cables and maybe the way that the image needs to present on the screen with their logo or other interface pieces. But 80% or 90% of it can be the same as what we’ve done before. So what this means is that we can accelerate the development time. We estimate that we can accelerate the development time by anywhere from six to twelve months. And we can reduce the cost for our customer by a few 100,000, maybe half a million dollars.

But most importantly, we can get to market faster. We’re also, in that case, using design elements that have already been proven out in other products. So they’ve already gone through the regulatory testing that’s required for the FDA. So that gives us a much higher confidence and reduces the risk that we’re going to have to go back and iterate on some of the designs. So this is the process that we go through to get the product into development.

As I say, we just introduced this Unity platform about six, seven months ago. We’re talking to some customers about our first products that will be based on that. We’re pretty excited about that. But even still, it takes a couple of years to go through, which is why we like to have a very robust product development pipeline to get to this two or three going into production every year.

Robert Blum, Managing Partner, Lithium Partners: So clearly the pros and cons here are the development timeline is incredibly lengthy, right? It’s a couple two to three years as you mentioned,

Joe Forkey, Chief Executive Officer, Precision Optics: maybe Unity

Robert Blum, Managing Partner, Lithium Partners: accelerates that, but it’s still in the multiple years. On the flip side, very difficult for customers to switch out your technology once it has gone through an FDA process, been approved out there in the market, creates a very long tail. I think it was clearly mentioned, but you know, to reconfirm you are the manufacturer of the product. Once it goes into production, you receive a production revenue going forward, you know, so sort of talk about the stickiness, if you will, of of customers, you know, the the length of time. But once you get them out there, how sticky these customers become.

Joe Forkey, Chief Executive Officer, Precision Optics: Yeah. Sure. So so there are there are a number of of reasons why it’s difficult for our customers to go somewhere else for manufacturing. Part of that comes from the fact that our IP is embedded in the product. There are some cases where we will negotiate licenses under certain circumstances.

We haven’t had to invoke those in any cases. But of course, our customers, after they invest two, three years into the development process, need to know that whatever happens if POC decides we don’t want to build it anymore, they need to have some mechanism to be able to continue building it. But the fact that our IP is embedded in the product is the first barrier to our customers switching out. The second piece is that our IP is heavily embedded in the manufacturing process, and that’s a place where we never give licenses to our customers. So that’s the second place.

They would have to find someone that’s able to reverse engineer the IP in the design, but then also the IP that’s in manufacturing. Beyond that, in the medical field and in the defense field, there’s a very high aversion to risk. And whenever you change manufacturing partners, there’s always risk that comes along with that. There are a number of reasons why our customers, even if there was an issue, would need to stay with us. Now on top of that, we’re very customer centric, we’re very customer focused.

We have great relationships with all of our customers. As I say, I can’t remember the last time a customer has left us to go elsewhere. We do have a couple of products that have been around for a long time, just to give some specific examples. Both of these are with very large medical device companies whose names people would know the top 10 or 20 medical OEMs in the world. And in one case, were making the same product for coming up on thirty years, I think.

And for the other one, we’ve been making the same product for twenty years. So once these products get into production, they stick with us. And part of the growth that’s happening right now is because we’re seeing significant growth in these two products that have just gone into production and are moving forward.

Robert Blum, Managing Partner, Lithium Partners: All right, very good. We’ve talked a lot about medical devices. One final point I want to sort of bring up here before we go on to aerospace defense is sort of the end markets, where you’re seeing trends specifically within single use Talk about sort of where the market is heading and how you guys are hopefully poised to benefit from that.

Joe Forkey, Chief Executive Officer, Precision Optics: Yeah, sure. So the minimally invasive surgery market, the endoscope market, if you like, in general, we find numbers anywhere from 5% to 10% annual growth rates for the endoscope market in general. Now, even before we get to digital imaging and single use, the places where we’re working on very small endoscopes tend to be an area that there tends to be more growth in because these are the places where new procedures are being developed and where the next generation procedures are being considered. And so those are areas where there’s a lot of growth because people are interested in going to places in the body that they can’t go before. And so there’s a lot that we’re doing in places where the incision size is really critical.

So we always talk about ear, nose, and throat for short, sinus, otoscopy. We do a lot with the eye, with ophthalmology. Neurology, the brain, spine. There’s a lot with urology and cystoscopy. And these tend to be the places where the medical device community is innovating to begin with.

Beyond that, use is growing much faster than the general market. And without taking too much time, single use really means we take the endoscope, we build it, we can build it at a low enough price point, in large part because of these digital imagers that I talked about. And then the price point is low enough that the surgeons can use it once and then discard it. And this reduces the requirement to do sterilization of an endoscope between one patient and another. There’s a huge safety benefit because you don’t have to worry if the sterilization is not 100% effective.

That’s been an issue for the FDA for many, many, many years. Turns out it’s easier for the hospital to track endoscopes. It’s better for the surgeons because they get a brand new image every time they open a new scope. And so we find numbers out there showing that the single use market, which we’re heavily involved in, is growing at two to three times the rate of the endoscope market as a whole. So it’s up around 20 or even higher than 20% year over year.

We’re seeing that in the mix of endoscope customers who are coming to us and in some of the products that are coming out. So one of the big products that we just launched in the last year that’s growing substantially is a single use product for cystoscopy and urology. We have another one right behind it that just went into production a couple months ago for ophthalmology for use on the eye. So we see big growth in the single use side of things.

Robert Blum, Managing Partner, Lithium Partners: All right, very good. Let’s, running short on time here. Let’s go through the defense aerospace. You mentioned about 40% of your revenues. A little bit different approach here, right?

You’re not dealing with the FDA. Development timelines, I think, a little bit shorter.

Unidentified speaker: Talk

Robert Blum, Managing Partner, Lithium Partners: through what the applications are that your technology is going into on the aerospace and defense side.

Joe Forkey, Chief Executive Officer, Precision Optics: Sure. So in many cases, we don’t know what the final system is that our product’s going into. There are a couple of general areas, though, that we believe our products are going into and that are sub areas within defense as a whole that we’ve targeted. Basically, it’s any place where the small size can be important. The defense industry has an acronym SWAT, which stands for size, weight, and power, SWAP.

And so the size and weight are things that we can help with on any system that uses optics. And so there are imaging systems on drones and things like that, which have to be lifted off the ground, so smaller size can be better. We’re seeing a lot of interest in our micro optics technology in the satellite industry. And so there’s lot of work that’s happening these days. Everyone’s heard about Starlink.

There are a number of groups and customers in the aerospace industry, in the defense industry that are looking at communications in space. Turns out if you’re trying to communicate between one satellite and another satellite, you have to be very precise in the directionality of the systems that you’re working at because the satellites are so far apart if you’re misdirected at all. It turns out some of the technology we developed for our micro optics technology to align these really small optics can be used in that area. So we’re seeing a lot of opportunity in the satellite communication area. And then, as I say, in the drones, they’re lifting off the ground, and so smaller size is critically important.

It also turns out that laser weapons, which is an area that there’s a lot of interest in because that’s one of the countermeasures against drones, which of course everyone is seeing in the Ukraine and Israeli wars, are being used more and more. So there’s more interest in laser weapons, and it turns out there are some micro optical elements that have to go into those. So those are some of the target areas that we’re focused on for defense.

Robert Blum, Managing Partner, Lithium Partners: Alright. Very good. Again, we could probably talk for hours here. One thing I do wanna touch on quickly, increases in manufacturing capabilities announcement went out here a couple of months ago talking about, you know, sort of needing to meet the needs of the growth that you’re seeing. Maybe just talk a little bit about the expansion on manufacturing.

Joe Forkey, Chief Executive Officer, Precision Optics: Yeah, sure. So there’s really two motivators for some facility updates that we’ve talked about over the last few months we’ve been working on for a year or so. One of the acquisitions we made was in Maine, and that’s the group that we combined the technical capability. There is a little bit of manufacturing in Maine. We’ve now consolidated that into Massachusetts.

So all of our manufacturing of the systems is happening in Massachusetts. We still have the other acquisition, Ross Optical, which continues in El Paso, Texas and continues with their small sub assembly manufacturing. But most of the couple of programs that have gone into production and the big ones that are moving into production that will require more space are all manufacturing in our Gardner facility in Massachusetts, which is mid state, about an hour and a half, hour and twenty minutes outside of Boston. So we need more space in order to do that. At the same time, what we’ve found is that both in our main location and in our Massachusetts locations, for historical reasons, we were pretty far outside of the nexus of the technical talent.

So in Maine, that’s in Portland. In Massachusetts, that’s in Boston. And there are a lot of professional roles, both in accounting and finance sales, but also in the technical side, where we’ve been challenged a little bit in recruiting people. And now that we’re growing as much as we are, we need to recruit more people into those functions as well. And so to solve both the recruiting issue for professional folks and the manufacturing issue where we need more space, we’ve made the decision to move our headquarters out of the Gardner facility in Massachusetts, move about half an hour farther east to a new facility, which will be in Littleton, Mass.

And that move will happen in the next month or so. We also moved the main facility, which is now purely technical, to a location in South Portland. That happened a couple of weeks ago. So all of these changes in the facilities are to support the increasing in manufacturing and the ability to get closer to the talent pools in Boston and in Portland.

Robert Blum, Managing Partner, Lithium Partners: Alright. Very good. We’re up against the clock. So, Joe, thank you so much for the time. Thank you to everyone for watching here.

Again, if you have any interest or, in in connecting with Joe, speaking to management here, shoot me an email. Tickers or email address is bloom,blum,@lithiumpartners.com. We have additional fireside chats coming up, so please stick around for more. Joe, thanks so much for your time today. Greatly appreciate it.

Joe Forkey, Chief Executive Officer, Precision Optics: Thank you, Robert. Thanks, everyone, for tuning in.

Robert Blum, Managing Partner, Lithium Partners: Thank you, Joe, for that discussion on precision optics. Don’t go anywhere just yet because up next, we have a company webcast with Valens Semiconductor.

Ben Shamsian, Vice President, Lithium Partners: Hello and welcome to Valens Semiconductor company webcast. My name is Ben Shamsian, Vice President at Lithium Partners. And today, Guy Nathanson at Valens will be taking us through their slide presentation. Valens trains under ticker VLN. With that, let’s get started.

Guy, welcome, and the floor is yours.

Guy Natanzon, CFO, Valens Semiconductor: Hello. My name is Guy Natanzon, and I’m the CFO of Valens Semiconductor, and it is a pleasure to be here today. Valens is a high performance connectivity company. We are a fabless semiconductor company, and we know how to deliver video in a high quality, low latency over a long reach of cables. We have the highest bandwidth, the longest reach, and the lowest error rate.

We’ve been established about twenty years ago. We are publicly traded in the New York Stock Exchange since 2021. We are two sixty employees. We sold to date more than 40,000,000 chipsets. Revenue of the last quarter, 2025, were $17,100,000 We are part of two global industry standards.

We have 125 patents, accumulated R and D expenses, dollars $05,000,000,000, dollar, hundreds of customers, and we address a $5,000,000,000 market opportunity. What are the pain points of wide connectivity? There are too many cables, distance limitation, video resolution that require a higher capacity, rough environment like electromagnetic interference, high cost of infrastructure, and installation complexity. We act in two main segments. The first one is the cross industry business that includes two main verticals.

The first one is the professional audio video, mainly around video conferencing and education. We work with companies like Crestron and Extron that develop video conferencing systems, companies like Epson, Panasonic, NEC that provide projectors, companies like Logitech that provides video bars and cameras. We work also in digital signage and in entertainment with companies like Sony on video walls, like companies like Samsung and LG Electronics on touch screens for a McDonald’s of the world display. In addition, we work in another vertical, which is the industrial and machine vision. Companies like B and R and Siemens, when we connect industrial PCs to screens that are located remotely.

And also in the medical sector, companies like Medtronic or like Siemens and Feneer, connecting MRIs to screens that are located remotely in the other room. Another segment is automotive. We currently work only with Mercedes, but we already announced on design wins with Mobileye as well. Our core competency is around the DSP. This is the heart of our technology.

Invested to date, $05,000,000,000 accumulated R and D expenses, 125 patents. We have one of the best semiconductor design teams in the world. Our advantage is our ability to handle electromagnetic interference. We do it with unique algorithm that by definition assumes that in every channel there is a noise, and we know how to eliminate this noise with advanced algorithms. The first market is under the professional audio video, and the main market is video conferencing that represents for the company opportunity of $350,000,000 by the year 2029.

What we’ve recently seen in this market is growth due to the hybrid education and hybrid work. We see trends companies like Microsoft Teams or Zoom that invest in certification programs for hardware devices, for video conferencing because it it is very important for them the quality of the video conferencing in the room, not just outside of the room. In addition, we’ve seen AI based applications, for example, cameras spread around the room that knows how to concentrate on the one that is now talking. We are part of this opportunity partnering in the companies called iCatch, and this is one example out of many for this threat. In 2024, we’ve released to the market a new chip, the v s six three twenty with USB type c connectivity.

This is becoming like universal standard and will allow us to penetrate into smaller video conferencing rooms. If until today, we used to concentrate on the high end of the market, with this chip, we can go also to the smaller and to the midsize. For example, in my own office, I can connect my laptop with one cable, USB type c, to a docking station, and from the docking station with HDMI cable through the wall to the screen in the other side of the room. And this kind of room is room that until today, we did not have a real solution. So this could be a significant growth driver for the company starting from ’26 and beyond.

We are part of a standard called HD Vest, partnering with companies like HD Sony and Samsung. And if you want to be HDBST compliant, you need to work with Valens. The other market is the automotive, which represent for the company a $4,500,000,000 market opportunity by the year 2029. Our main focus is around ADAS, autonomous driving system. And here is the use case.

Imagine a child crossing the street. The camera in the front of the car will capture a video picture of the child, will deliver the video picture of a of her cables to a centralized computing system in the car that knows how to analyze the video picture and in few milliseconds stop the car automatically. This is exactly where we have relative advantage. We know how to deliver high quality video over a long reach of cables, and we know how to do it in a low latency. And what is most important, we know how to handle electromagnetic interference in the car very well, and there are a lot of them due to the solar towers in the side of the road, due to the electricity in the car, due to the engine in the car and so on.

And this is a key advantage where we can play. Mobileye, which is considered to be a leading company in this industry, after a long evaluation process, chosen a Valens for specific three design wins with leading OEM from Europe. We cannot disclose the name at this stage, but I can tell that we have a strategic partner with Mobileye, and we’re very excited about it. This is an evidence to our advanced technology because Mobileye is considered to be a leader in this world, technology leader in this world. And we expect Mobileye to take us to other opportunities with other OEMs in the future.

The expectation is that this specific design wins will start ramping up from late twenty six and beyond with full ramp up 2829. We currently have more evaluation process in ADAS systems with different OEMs. We currently we believe that we expect to be a very significant player in this market. And once there would be a full deployment of ADAS in the world beyond the year 02/1930, we might have even hundreds of million dollar of revenue from this vertical. The other opportunity that we’re currently addressing in the market in automotive, which is currently a 100% of the revenue in the market, is from Mercedes.

We have been able to secure design win in with Mercedes with respect to infotainment opportunity. It was a very specific opportunity that we were able to address in 2019. The system was commercialized in 2021. And in 2024, this this opportunity generate for the company $20,000,000 for the year. Mercedes is with us.

We expect this opportunity will continue to generate revenue for the next few years. In automotive, it is very hard to get ink, but the cycle once you’re in is very long. So we expect few more years of revenue generating from this opportunity when we’re service. Another opportunity that we have in automotive is driven by a company called Stoneridge. It’s related to long vehicle with respect to a specific application of video camera that knows how to capture the video from the back of the truck and deliver it over the electricity cables in the truck to the front.

And this with another application of surround view could represent interesting opportunity for the company in long vehicle, which is expected to be commercialized for the year from the year 2026 and beyond. In the ADAS, we are part of a standard called MIPI A5, partnering with other companies, for example, like MediaTek, Qualcomm, and others. The main competition is coming from giants like Texas Instrument and analog device. It’s a very challenging competition because it is very hard to convince OEM to replace these products with ours. When we were able to achieve this, it was with knockout with significant advantage.

For example, our ability to handle electromagnetic interference, our ability to achieve high resolution to support in high resolution cameras. This kind of advantages is where we can win these companies. There is a whole ecosystem around MIPAFI with different companies providing different type of products either in the system or in the module or in the silicon side. The third vertical that we started to address mainly in late twenty four is the machine vision or the industrial machine vision. This vertical represents for the company almost half a billion dollar market opportunity by the year 2029.

In the industrial, we already have few design wins that are already in mass production. When we connect industrial PC to a screen that is located remotely. Companies like Beckhoff, B and R, Siemens, and other. The new vertical is the machine vision. And I would like to explain and illustrate our opportunity with the following example.

Imagine a manufacturing machine of small parts. In the end of the line, there are two cameras for visual inspection purposes. They need to capture video picture of the parts over the line and deliver the video picture in high quality, low latency over a long reach of cables because you cannot use wireless in industrial environment to a PC that is located remotely in the other side of the industrial hall. And then there is AI based applications that knows how to analyze this video picture and instruct the machine which parts should be eliminated for quality purposes. This whole process should take only a few milliseconds and should be very accurate.

We know how to provide the infrastructure for these AI based applications. And we know on top of the other things, how to handle electromagnetic and pufferness that are very common in industrial environment. So we started as the first activities in this market, day 24, with existing products that we have. For example, the chip that was developed for automotive is very much relevant here because it has small form factor, low power consumption, and the the interface which called CSI two, which is very much relevant for the industrial world. We’ve already been able to announce on few design wins, models, cameras, and other related products, and we expect initial revenues from late twenty six and ’27 and beyond.

Another vertical that is still for the long term but becomes more more relevant recently is around the medical space. In the medical, we already have few applications connecting MRIs, for example, to screens that are located remotely in the other side of the room with companies like Siemens and SENIOR and companies like Medtronic, but these are relatively small in terms of revenue. The new and interesting potential opportunity that represent more than $600,000,000 opportunity here in the long term is related to single use endoscopy. Recently, we’ve seen trend coming from the FDA asking from the meta companies to go into and replace from multi use to single use in order to eliminate the risk for infection. And if they will adopt this solution, that means in significant increase of the volume in this market.

Today, there are 250 procedures of endoscopy every year in the world. And we have a product, which is the same chip for the automotive, which has a very good product market fit for this market. Small form factor, low power consumption, ability to handle electromagnetic interference that are a lot of them in the surgery room, and ability to provide high quality video in low latency to the doctor. We’ve recently had initiated discussions with different type of customers in this industry and received a very good feedback, which is a good indication from our perspective that this could be interesting opportunity for the future. We would not expect revenue before the year 2028 and beyond, but still it could be a potential upside for the company in the future.

So we have the same core technology that can serve different verticals, and most of the products of the Chicks are already out there in mass production. Some of them can serve different markets, different verticals under the same core technology. Getting to the financials. In the year 2020, 2019 and 2020, the company generated revenue mainly from the professional audio video market. It was around $60,000,000 a year.

In 2021, the professional audiovideo continued to generate around $60,000,000 a year, but it was the first year of commercialization of the automotive or the Mercedes design win and the revenue grew to $71,000,000. In the year 2022, with significant upside to $91,000,000, when the professional video increased to $74,500,000. It was related to the post COVID effect of the supply chain issues, and our customers were afraid to be left without inventory. So basically they ordered more than they did. 2023, the revenue from the professional video got back to the normal level of around $60,000,000 Automotive grew to $27,000,000 The overall revenue of the company decreased from $91,000,000 in 2022 to $84,000,000 in the year 2023.

2024 was a rebound year for 2022. The professional DVD market declined significantly to $36,000,000 of revenue because of two reasons. First of all, in the beginning of the year, our customers had high level of inventory because of the stock in 2022. And the interest rate was very high, so they basically did not want to order new inventory and wanted to consume the existing inventory. In addition, their customers, the video conferencing providers also suffered from declining revenue about 30% in 2024 because many companies invested a lot of money in building new video conferencing rooms after the COVID, and ’24 was kind of relief year for them.

So the revenue in ’24 declined to $58,000,000. In 2025, we see nice increase. Revenue in the first quarter was 16.8, and the second 17.1 above the guidance. And the guidance for the year are anywhere between 66 to $71,000,000. If we take the midpoint of this guidance versus the revenue of 2024, we expect increase of about percent year over year.

Gross margin in Q2 was 63.5%. The CIB is around the 70% gross margin and the automotive is above the 50% gross margin due to some optimization in the cost structure of the chips that are being sold to Mercedes. And we had EBITDA loss of $4,000,000 For the third quarter, we see some decrease in the revenue, 15.1 to 15.6 due to the effect of the tariff. And gross margin is expected to be anywhere between 58% to 60%, and EBITDA loss anywhere between 6.8% to 7.4%. Q4 should be increased again.

And for the year, we expect anywhere between 66 to $71,000,000 of revenue for the year. Balance sheet. So we have a cash balance of around $102,000,000 end of the quarter. We started the year with $131,000,000 and we had buyback program during the start that we started late twenty four. During the 2025, we consumed $20,000,000 out of the overall $25,000,000 of the two buyback programs, which means on July, we ended the second buyback program.

Inventory level were $11,500,000 end of the quarter. So, and this is about the balance sheet. On November 2024, we presented a strategic plan for the company and set the goal for the year 2029. We said that our goal that by the year 2029, the company will be able to generate revenue of anywhere between 200 to $300,000,000 and above the 50% gross margin and above the 15% EBITDA margin for the company. The company can be EBITDA positive at annual run rate of revenue of around $120,000,000.

We did not say when we expect this to happen. In the short term, we expect growth of coming from the professional audio video market with the recovery. And on top of it, increase our footprint into the smaller size conference video conferencing rooms. Our goal for ’29 from this vertical is ninety to a hundred million dollar revenue with gross margin of anywhere between 65 to 75%. In the midterm, Industrial Machine Vision should start generate revenue from 26% and beyond.

We expect revenue from this vertical to be anywhere between $35 to $50,000,000 by the year 2029, with gross margin target of anywhere between 55 to 65%. We expect automotive to start ramping up early initial revenue from ’27 with ADAS, beyond the Mercedes revenue, and ramp up in ’28, ’29 and beyond. Our goal for ’29 from the automotive is anywhere between 65 to $110,000,000 of revenue with target gross margin of anywhere between 35 to 45%. We expect additional ramp up in the revenue and potential upside beyond the year 2029 when there is a full deployment of ADAS in the world and the adoption of our solutions into the medical and single use endoscopy. So our goals for this year, the revenue guidance 66 to $71,000,000 professional dovidia would like to see recovery and adoption of the six thousand three and twenty solution, industrial machine vision, more design wins, and the same for automotive.

To summarize, Valens represent opportunity for 30 to 40% average annual growth revenue year over year, diversified customer base, design win cycle that creates predictability of the revenue and stickiness of our customers, long term profitable business model, and strong cash balance. Thank you.

Ben Shamsian, Vice President, Lithium Partners: Okay, Guy. Thank you for your time today, and we appreciate you presenting to us. And thank you everyone for watching. If you have any questions and would like to schedule a meeting with Valens, please send me an email at shamsianlithampartners dot com. That’s S H A M S I A Nlithampartners dot com.

We have additional presentations on fireside chats coming up next. So please stay tuned for the rest. Thank you everyone and have a great

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