Joseph Hernon: Yes. I don’t have a lot to add on top of that. I think that one of the points that I was trying to make is that we’re in a unique position from a cash flow perspective in fiscal ’24 because we’ve already bought and we’ve already paid for much of the material cost to produce these 1,200 drones. That won’t be a typical situation. But because of COVID and the scarcity of electronic components and there was a lot of price gouging going on. Allan had the foresight to go out and frankly spend quite a bit of the money we raised in 2021 to put us in a position where we wouldn’t be unable to fill orders because we couldn’t get the components we needed. So we’re in a unique position right now. And as part of your initial question, yes, we’re just dealing with a capacity utilization challenge, which is very common for emerging companies that built the type of facility that we built, which is another — that’s built, that’s behind us.
That’s firing on all cylinders, and that’s a huge step for an emerging growth company like us to have behind us. It’s kind of one of the reasons why we feel so good about our outlook for the rest of fiscal ’24 and beyond.
James McIlree: That’s great. If I can just ask another one here. So on the SRR and the replicator programs or contracts, are these fixed priced contracts. So you will have the ability to improve margins as you improve your manufacturing or is it more of a time and materials contract.
Jeffrey Thompson: No, no. Yes, I’m sure you’re bringing that up because the time and cost are over plus is a horrible business. Now these are fixed. They’ll be fixed to our GSA pricing. We’re not even allowed to adjust that typically unless there’s a large volume. But, yes, our margins will improve dramatically. All of the orders that we’ve announced before have been GSA pricing. So this will the SRR program will be based on fixed pricing, the replicator program, which is something that also we didn’t really go into, but when they were announcing the — making sure that these small companies that are building these small drones don’t go into the value of death, which is the funding value of debt when you’re dealing with large government this replicated program, we expect to get paid up front, which alleviates also dilution for us like again as being a large amount of shareholders. So we — the pricing will be fixed pricing.
James McIlree: That’s great. And my last one is the 5 million in OpEx this quarter, is that a good number going forward?
Jeffrey Thompson: Yes, I would say so.
Joseph Hernon: Yes, I would say so as well. Unfortunately, I don’t see a lot of cost savings associated with the best in consumer. Obviously, there’s a really substantial fixed costs and being a public company. I do think the good news is that higher revenues should not result in dramatic increases in these expenses. You can see operations expense actually decreased in the fiscal first quarter. So I think we’re going to be able to leverage both gross margin and our OpEx meaning that as revenues increase, I don’t see dramatic step in step increases in OpEx.
James McIlree: Great. Thank you very much. That’s it for me.
Operator: [Operator Instructions] Showing no further questions, this concludes our question-and-answer session of the call. I will now return the call to Jeff Thompson for closing remarks.
Jeffrey Thompson: Sorry, folks, I was on mute. Well, thanks, everybody, for joining us. I want to thank the team at Teal. I want to thank our BizDev team. You guys are awesome. And we’ll be seeing a lot of you out. We’re in a lot of conferences and I’ll even plug James’ and his company, but we’ll be at the Dawson James conference on the 12th and we’ll be at the LD Micro in early October. So please come see us.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
