BluGlass Limited (BLG) Earnings Call Transcript & Summary

Good day, and welcome to the IAccess Alpha Virtual Best Ideas Fall Investment Conference 2026. Our next presenting company is BluGlass Limited. [Operator Instructions]. I'd now like to turn the floor over to today's host, Jim Haden, Chief Executive Officer and Managing Director of BluGlass Limited. Please go ahead.

Thank you. It's great to be here. We're going to go through this presentation. And as you enter the questions, we'll come back to them at the end in case there's an answer to your questions later in the presentation. BluGlass is publicly traded company. We're working on the next evolution of GaN laser technology. We are a publicly trading company, so a standard forward-looking statement. Basically, what we'd like you to get out of this is understanding that we deliver world-leading visible gain lasers, and we're working with some of the largest government agencies, defense primes, technology companies that there are in the world. And we're doing that as a relatively new turnaround startup. BluGlass, as I said, delivers the world-leading lasers. We are expanding the markets well beyond traditional IR lasers. I'll talk a little bit about the IR lasers and how we're playing in that very mature domain. It basically is enabled by our proprietary manufacturing processes and our ability to design and design lasers that provide solutions for our customers. We have 58 patents who are vertically integrated. And basically, what we are doing is creating high fidelity lasers at high power. Our longest-running contract now is subcontract the U.S. Department of War, and it's totaling $4.4 million so far over a few years. We also have recent contracts that we've announced this calendar year with a Tier 1 Defense Prime Fortune 500 data storage company, a small innovative start-up called Ubiquity, and we're also dealing with some of the leaders in quantum lasers for quantum computing. And so this is a -- these are projects that are leading to products. And these -- it's what we call a product -- project to product strategy. and we have a growing pipeline that we've been running for a couple of years now and then staying robust and healthy. We are -- we have 3 specialized fabs, 1 in Australia, where we do the first step of the program. Everything else is done in the United States in our Silicon Valley fab and also in our Nashua facility where we do the packaging and the well testing. We have traditional revenue that we are moving away from. This is a look at our growth in the projects, the lighter blue and products is darker blue. And I joined the company in fiscal year '22. Brad, who is also on the line made a pitch to pivot the company from an equipment innovation company that was licensing the equipment that we are developing, which was called RP CVD, enabled us to create an innovative way of making these GaN lasers, and that's why we are able to already get a little bit of revenue after 1 year in fiscal year '23. And then you could see the ramp in throughout the fiscal year '25 and '26. And there was a slowdown, as you know, in the transition. There was U.S. government shutdowns continuing resolution problems, and we are able to -- when the year shifted to the calendar year of '26 in the middle of the government's fiscal year, we started getting announcements we had 4 announcements in the first part of the year, and then the latest one was a $1 million deal with Ubiquity. So you can see the revenue growth and recovery in the as we move through the different -- into the Q4 of our last fiscal year. Omer joined the team about a year ago. He was introduced to us by some investors -- new to investors in another company. He's on the [ Board of Mero]. He brings a great breadth of experience and very talented in the capital markets understands the U.S. markets. And as we are moving more toward that his experience has helped is fundamental for us getting to where we are today. We had our biggest capital raise ever this year, and we are here to discuss the progress we're making. I've been in this industry since grad school, like lasers, my entire life. And I think that's a prerequisite doing well, is enjoying what you do. I've been at such companies. I started at Hughes Research Labs, went to my first -- joined my first startup straight out of grad school. It was called SDL. We merged with JDS Uniphase for -- is a $1 billion deal. JDS Uniphase then split into two companies: Lumentum and Viavi. Lumentum is a portion that I belong to as [indiscernible]. I went from Lumentum to Coherent where I ran their semiconductor business unit. From there, I became the COO of [indiscernible]. And then after that, I participated as a consultant in a company called KSL D. They actually were SLD, our successful exit there was a merger with Kiacera, hence the K. And so, these -- I wanted to understand now why markets are interesting and basically, they are everywhere. They underpin all of the major macro trends that you see in the -- in the world today, the global economy. And basically, it's a huge TAM. They are in health care, defense, I advanced manufacturing, clean energy in the space, quantum, all of these places that you hear a lot about lasers play a role in a fundamental role in that. So then if we look at what's happening in the laser market, these are some of the companies I talked about that I've been involved with. And if you look at the lowest line, that's the NASDAQ. And maybe it doesn't look that impressive to you realize that, that was a 33%. That's not a flat line. That's very healthy growth, but the laser market, the photonics market overall is doing better than that market. And so if you look at where we are playing, we are gain. And so traditional markets, which you call IR visors, IR are invisible light, you can't see it, but it's delivers a lot of high power. And it's in all of these industries and more. The focus we have is looking where visible light doesn't have to compete directly with the IR line. And the 3 areas that we are focusing on are defense, aerospace, Quantum, biotech and Biomed. Those are areas where the technology, the applications are being enabled by the high-energy visible light, getting more into what that means for us. But then we also look at places where the like the competes with disrupts actually the IR and the LED technologies. From there, why Gallium? Well, gallium nitride lasers is a very efficient and effective way of making the visible light. If you -- there are ways of making it from life, but it's very expensive, very cumbersome and very large. So this is a critical semiconductor. It's been identified as a critical semiconductor by the United States government. We are able to generate lasers from UV light all the way to green light. And this high-energy live interacts with the world differently. So it's essential for applications in defense and Quantum and biotech. And the reasons I'll go a little bit more in detail. But basically, it's critical for things like navigation in GPS-denied environments like the problems that you're seeing over Ukraine. It's essential for improving underwater visibility and LiDAR for undersea warfare applications, it's uniquely positioned to interact with organic materials such as coronavirus and other things. It basically sterizes and kills pathogens in a way that the IR that I cannot do. And this next slide sort of does a comparison of the emerging technology on the top and the IR traditional on the bottom you could see where we have a target is where we hit very specific functionality that cannot be achieved or is not achievable by IR. And so then there's other areas where the circles where both of us, the IR and the visible can achieve it. So if you look at quantum computing, quantum sensing, IR is always going to have a big role there, but visible is going to play a role as well. In the med tech and sanitization, there are things that IR is always going to do better, but some of it like the fluorescent markers in carcinogens and DNA mapping and killing pathogens requires a high energy light. In the atmospheric detection outside of planes in the aircraft, that you just have to have the visible light to scatter off the clear air I'll go into a case study on that. But the online to scatters to weakly. It has a different application, but I can't see the -- clear our turbulence. And underwater IR light is absorbed in millimeters where the blue light could be propagated for LiDAR or for hazard detection or communications, underwater that you just can't do with the IR light. These are -- if you look at the conventional laser market, and as I showed, there was a very good growth from the companies -- the photons company that represent a large part of that market. The accelerating forces for that conventional market are AI, quantum repeating, defense and security, that's driving a lot of it. Some of it is post-pandemic, but also growing the growth in the U.S. is reshoring technology after the pandemic issues. And the way we saw China respond and closed their markets. So the U.S. and its allies are very keen on having -- sorry, I don't know why automatically went there. I think somebody else is moving the slides. All right. If someone's doing that, please stop. Emerging technologies from these markets. You can see the conventional market is growing at a higher rate, 68% CAGR is projected to 2030. And because of the enabling factors of this, the visible market is growing 3x to 4x in the same market, but enabling applications that can't be addressed by the IR. These are some of the household names that are participating in the photonics industry or potential customers or customers we're already talking to. If you look at that [indiscernible] why lasers, why GaN laser specifically, who's interested and now why BluGlass. Driven by the tailwinds of these markets and our onshore strategic footprint, where we've got Sydney, Australia, which is actually great because there's -- you probably heard of the August alliance, which is the Australia, the U.K. and the U.S., there's a big alliance that they've done that require Photonics. Then we have our Silicon Valley and Nashua packaging facilities that support the made more in America. And then we have the product portfolio that we provided. I'd like to say that our competitors are all part of huge conglomerates. I mentioned [indiscernible] start-up worked out was acquired by [indiscernible], a multibillion-dollar Japanese corporation. There's other corporation in Japan. [indiscernible], that's a huge one. All of the competitors that we have are embedded in these large organizations. So a little bit like Henry Ford when you first started the company, he said you could have a Ford in any color as you want as long as it's black. Well, that's what our competitors do. You could have the lasers anyway you like as long as you get it in a TO-can which is only one of the several solutions that we provide, and that is why companies are moving to blue grasses. We have the flexibility the know-how to do packaging and solutions that our other competitors who are not interested in doing. And it's all part of our project to product strategy. So some of the customers I talked about, government agencies, defense prime, prime subcontractors, OEMs, and so forth. They have an idea of a product that they need, they need lasers to go into that product into their platforms, into their planes. And so they come to us and say, look, we want to fund a project for you. Here's the product we want. And if everything aligns is a product that we can and want to make then we'll take an initial development order for prototypes that we develop. And then we move through the product life cycle, all of these -- most of these contracts come with these the desire to enter manufacturing supply agreements at the end of the project. One project that we talked about as a case study would be with a defense prime and one of the largest in the aerospace and defense business. They are doing atmospheric detection. One of the aspects of the atmosphere detection is looking for clear air turbulence, the clear air turbulence is basically up drafts, down drafts that cause plans to drop very quickly and violently it could lead to damage of the planes they estimate about $100 million a year in addition to hurting the passengers last year, someone had died by hitting the top of the plane. And so it's a very real threat and it's an invisible threat that's undetectable by traditional mechanical and higher sensors. Our customer leads the field in supplying those solutions. And they came to us. They looked a small order in 2025 for some of the products we made, they ordered from to of the Japanese companies and the European company and the other U.S.-based GaN company that's owned by a Japanese company. they evaluated all of us, and they chose the 35-person company, not the huge conglomerates because of the features that I told you, but basically, our technology with the high fidelity they're called DFP lasers, we were able to provide very high fidelity at high power. So basically, our technology reveals the invisible which positions us as the first deployable GaN-based solution for clear air detection. What this means for our customers' customers is enhanced mission, safety and resilience for both military and commercial fleet, reduced passenger injuries. And this next-generation atmospheric intelligence for predictive flight management that's going to make both manned and unmanned flights safer. And the key is that this could be done with very large lasers, but they don't fit well on planes. So our technology is taking very large lasers putting in what's called swap that's basically making them smaller and more size weight and better power consumption. So our strategy to go after this market is to -- it's basically a 4-pillar strategy. The first is focusing on our technology, our technology leadership and strategic partner -- industry partnerships as we are building those with the announcement we already talked about this year. We're expanding our partnership with the U.S. government -- we are growing the market share, and we're doing -- we're looking at both inorganic and organic growth. If you look at the supply chain where we start is at a component level, already validated, and you could see at the component level or growing revenue that I shared, and we're getting into modules. Those modules are integrated solutions at the first level that we're going into, if you look at something like quantum computing, it's about a 2x to 3x reduction in the optics required for a quantum computer. That's going to be necessary to start getting larger volumes as we approach 2030. 2030 and beyond -- 2035 and beyond, you're going to need photonic integrated circuit. So we'll continue to move up the food chain into subsystems as well. And so this is a way to accelerate the growth. We basically are then taking that, putting it into an outlook that is expanding our capabilities and moving to higher -- it's a higher mix program, but a higher ASP program than what our competitors have, where they're focused on very high volumes, very low mix, and they're doing things like the white lights for headlights for replacing an investment balls and those types of things. So just to recap recent achievements, we're entering another year with the Emmy Commons Department of War contract. We are delivering on our milestones in all of the previous years and just wrapping up another year before the end of the government fiscal year, at the end of this month. We've partnered with industry leaders in defense and commercial as well. we are powering the first human safe laser, which is for you could do viral mitigation in rooms where people are occupying, and the milestones we expect is continued growth in these -- all these areas, the 3 main markets, continue to partnership and build our U.S. government alliances. And basically, we're going to continue to work our funnel and advance these capabilities. So what we've covered now is that lasers are a critical technology can lasers with the high energy are enabling new and innovative applications. The timing is perfect with the growth market in overall laser market growing faster than it traditionally has. And then if you look at what we are doing as an industry leader is we're providing this high fidelity light that could be used to interrogate the atmosphere, used to interrogate DNA used to interrogate different cancers. And it's because it grows it interacts differently with the world than the traditional lasers. So we're in the fastest-growing least-crowded laser market and Blue gas delivers the high fidelity and precision necessary to go after these aerospace, defense, quantum, health care and the biotechnic applications. Thank you.

It looks like we have some questions. All right. What sectors are driving the revenue today and what sector will be the largest segment over time? Brad, do you want to grab that one?

Sure. I mean largely, today, it's defense and aerospace, but we actually see the advancement of Quantum as quantum computing and quantum sensing moves from lab-based systems into commercial systems. There's a big opportunity for BluGlass.

Okay. The next question is how important is U.S.-based manufacturing when competing for defense, government and large OEM programs. It's very important for us. I'll start off, but also like to get Omer's opinion on this as well. But it's key when you have things like ITAR and government programs that require the security and U.S. participation only. So it's vital to have these sites that are both what's called CUI and ITAR eligible sites. And it's huge for us to be able to do these designs, especially if we are going to get into very specific government programs. Right now, we are building a broader technology and it hasn't been a huge issue, but it is rapidly becoming more so, and then participating in to make more in America. That is something that the U.S. government values and they want to have the secure supply chain. And this is something that Omar and his investment team are keen so I'd like to get him to answer as well.

Yes. Thanks, Jim. And again, thanks, Brad. We haven't really introduced. So Brad is our VP, Business Development and I consider them also one of the founders because originally, he was the one we led the pivot into GaN lasers. So I just wanted to introduce them. And as Jim said, I'm the Executive Chair, I joined the company a few -- about a year ago, as a Board member, a few weeks later, I assumed the position of Executive Chair. I'm also the largest individual investor and this is also Important to say that the Board and management are completely aligned in terms of our investment in the company. So we are all investors also as well. So we're not just -- we're not just executive running a company. And this is part of our strategy. We always -- when we invest, roll our sleeves and join great management teams, and this is what I found when I joined BluGlass. So again, thank you, Jim, for this presentation. Now, with respect to the question, U.S. based manufacturing is key. And what we see today and when you think about the Iran more and what you see in Ukraine and all over the world, the deglobalization doesn't really matter if you have the best technology in the world, if your supply chain goes through China, Russia, or other countries that you cannot really control that the production or supply chain that production or supply chain, you have a problem. So there's a big push in the U.S. to bring industrial base back home, and that's what we're focused on. And what we see also in all these -- in many projects, the requirement is for the system to be produced in the U.S. but also sourced in the U.S. So for example, we saw project Port Authority for LiDAR. And the requirement was that the LiDAR would be manufactured and sourced in the U.S. So the fact that we are an onshore company with a U.S.-based CEO and is key. And also where we grow the wafer is 1 of our all countries, Australia. So with that, I'll give Jim back, Jim can continue to the question.