Glenn Mattson: That’s great color. And then just a follow-up on that. And then last one for me. Just the — so is that level of germanium that you’ve received? Or is there — can you give us — is there like a magnitude of impact that you would expect revenue this year based on this shift that you’re…
Sam Rubin: I think as of now, we’re looking at $1 million to $1.5 million of — in the next two quarters, maybe I think that we can something like that?
Al Miranda: 1.3
Sam Rubin: 1.3, right so 1.3. But we also — if you remember, December — November, December is usually the time of annual renewal for two of our largest customers for infrared components and one of them is very heavy on germanium. So even though what we did so far is only for the short-term impact there, we’re probably not going to reduce that contract to the level it was before, at least some in germanium. I do want to note that our two largest germanium customers are working with us very actively at designing and testing alternatives made of BD6 or our Black Diamond altogether. So we wouldn’t do this if we wouldn’t feel like a real potential very, very soon to fill the tank capacity upwards better work. And so I think it goes hand-in-hand, but it’s sort of sometimes it’s sort of a bandage you have to rip and start working on it.
Glenn Mattson: Okay. Thanks for the color.
Sam Rubin: Absolutely. Thank you.
Operator: [Operator Instructions] Our next question comes from Brian Kinstlinger from Alliance Global Partners. Please go ahead with your question.
Unidentified Analyst: Hi, there. This is Shervin on for Brian. Congrats on a solid quarter. Let me just hop right in here. So I know that backlog can be lumpy given the timing of multiyear contract renewals isn’t always consistent. Now with Visimid opening your addressable markets, even more commercial applications, when can we expect to get more consistent growth in the backlog specifically? And do you see it coming from a specific product?
Sam Rubin: Yes, I definitely think that the Visimid thought and sort of the higher ASPs that come both from Visimid and overall, our transition into more engineered solutions could mean two things, really. So in terms of the backlog, one is, again, larger chunks being added in at the time because the ASPs were higher, but it could also accelerate our growth on the top line, again also because the ASPs are much higher. So booking an order for 100 Mantis cameras at $7,000 each would have a big chunk to the backlog, even though by volume, it’s nowhere near an order of 100,000 lenses, for example. So I think we’re going to start seeing more and more so. I think that the new reporting group structures that I’ll present it and that we’re starting to work with will help give much more visibility into that
Al Miranda: Yes. The one thing I would add is Visimid prior to acquisition wasn’t really geared towards sort of the long-term contracts with customers. It kind of wasn’t their focus, a smaller company, the owner sort of relied on relationship and handshakes that things would come through. And they did. It worked. But technically, that’s not a backlog. A couple of e-mails and a promise is not backlog. So we’re going to — we’re sort of transitioning the customers, which are large customers and a customer doing it. They just had not been it. Going forward, we’re going to get longer-term orders or 12-month orders or what have you. We’ll start seeing that in Q2 coming from Visimid, the first of which would be the Lockheed contract that Sam mentioned.
Unidentified Analyst: Great. Transitioning into Lockheed, maybe you could detail would you guys expect the potential time line would be like? Like how long is the design period and what comes next? And how many companies are you competing with, if any? And what are the risks and catalysts to reaching those tens of thousands of units at 10 that you guys were talking about?
Sam Rubin: Sure, absolutely. So first of all, the initial proof of concept was done already and delivered by Visimid prior acquisition. So this is a project we sort of knew was already in the works. We kind of monitored it from afar. But it’s been something that Jason and the team at Visimid has been working on for a long time. On developing the core technology behind it, which is very, very unique. From this point, I think we have now about three years during which time we developed — we develop the technology further into EVT, DVT, I believe we’re going to deliver during that three-year period, some dozens of units, maybe even 100 or so. Following that, there’s expected to be significant testing by Lockheed’s customer in which by the end of that and it could take up to were told it could take up to 2028.
So it could take up to a year and half almost. They will compare our customers’ product with a different company that is developing a similar missile to compete on this. And we’ll choose one or will choose to split between the two. The tens of thousands of units come from what we know and in public information even I can’t name it, but the existing products that this is going to replace. And so — it’s not something completely new. This is really a new version of a — if you would, an existing weapon system. And at the end of it, it would either be Lockheed or the other one or also very, very likely split between the two
Unidentified Analyst: Great. That’s good to hear. So what — for the next question, what are the next steps in getting all of your BD products fully qualified? And what should investors anticipate from a [indiscernible] perspective of – wider adoption over germanium, especially when you’re saying that germanium is getting harder and harder to obtain.
Sam Rubin: Yes, absolutely. So the process to validate for manufacturing readiness of our new materials include very, very significant testing of essentially thousands of samples, if you would. That’s what Defense Logistics Agency, DLA is essentially bank rolling and what we’re working on. There’s one key piece of equipment called refractor meter very technical things. Its extremely expensive piece of equipment. I believe there’s only two of those in the US to give a sense of just how specialized it is, we’re waiting for the delivery of ours. Once it comes, which should be any time in the next 6 week to 8 weeks, I hope, we have already prepared a lot of samples definite and will essentially be tying someone down to a chair next to it, and he doesn’t leave until he measured all the sample sort of thing.
So we have an enormous amount of samples and materials we’ve been preparing for many different measurements, but that refractor meter is probably the most important piece of equipment for the measurement and for ongoing quality control of some of those materials later on. This will provide the, I’d say, sort of book of data, if you would, for optical designers showing not only if you give a parameter what is the CTE, The Coefficient of Thermal Expansion to not just provide one number and say it and that’s it, but actually provide with it some statistical information showing, this is coming out as a result of measuring its on 150 different samples from 10 different lots produced in different places or in different ways, making sure that we take into account the variability and there’s very, very significant statistical data behind it.