Virtuix Holdings Inc. (VTIX) Earnings Call Transcript

All right. Welcome, everyone. Thank you for joining our investor webinar. My name is Jan Goetgeluk. I'm the Founder and CEO of Virtuix. I'll start off with some introductions. I'm joined today by my long-standing partner, David Allan, who is our President and COO. David leads our worldwide operations and has a storied career in manufacturing, specifically in Asia. He led big manufacturing programs for, for example, Flex Spectronics for customers like Apple. I'm also joined by -- David, Yes. I'm also joined by Lauren Premo, who is our Chief Marketing Officer. Lauren joined us also stored career in marketing. For example, she was a Director of Marketing at Corsair, which is a big gaming hardware brand. What I'll do today is I'll walk you through some slides first to give you an update on the business, and then we'll open it up for Q&A. You'll see at the bottom right of your screen, you'll see a question tab where you can put in your questions. We won't answer those during the presentation. But at the end, we'll start to go through and answer the questions we can answer, also we can't answer any forward-looking requests or information. All right. And it's great to see so many people join us today. It's great to see the excitement. We wanted to do this webinar because we have a lot of recent developments and success that we wanted to share since our latest earnings release. We didn't want to wait until the next one. There's also been some -- there's been some volatility on the share price, and we're not necessarily supposed to comment on the share price. But I'm getting a lot of ways a lot of texts and e-mails about that. I know a lot of you personally, many of the investors here and shareholders on the webinar. Many of you have been with us for many years, even 10 years. Also keep in mind, management and the Board also have shared are the biggest shareholder of the company. So to see the downward pressure on the share price, sometimes with no apparent reason or no apparent negative news, it's certainly gut-ranching for all of us sometimes had scratching. And look, at the end of July, about 6 weeks ago, we had our lockups expire. So about, well, over 15 million shares got added to our flow. So that's certainly expected to add some downward pressure. And I'm hopeful that that's behind us. We're having a bit of a rebound. And look, ultimately, I believe and we believe our business is doing really well. So what I want to show to you today is just the strength of our business or growth or momentum in the defense space and the enterprise space, the potential acquisition, the pending acquisition, we alluded to that -- if completed, we believe will be a major catalyst for us. We have a lot of great things going that we want to share with you. And ultimately, we as a team, we focus on what we can control and what we do best, which is building great products and continuing to build a great company. So without further do, I'll get started here. Just a quick note on forward-looking statements. During this presentation, I may make forward-looking statements do not place undue reliance on those. All right. So let me start off with some highlights. As you know, we're a leader in full body immersive simulation, and we do that with our core technology, the Omni, which is an omnidirectional treadmill that lets you walk in on around inside virtual reality works. You're not just sitting down and pushing buttons, you're physically moving around inside the virtual world. We do that for entertainment and gaming on the consumer side. as well as defense for trading and simulation and enterprise. So a couple of key highlights, recent successes and developments. On the consumer side, we launched Omni One for Quest in collaboration with Meta at the end of June. And since then, our new orders for Omni One systems are up 3x, threefold quarter-to-date compared to the same period last year since that metal launch. So it's a really exciting growth pattern we're seeing strong momentum on the consumer side with our meta large. We'll talk about that more. On the defense side, strong momentum and traction there. We are already working with all 4 major branches of the U.S. government Department of Defense, the Marine Corps, the Army, the Navy, the Air Force even sold units to the National Guard. So I'll go through each of the various projects and awards we have going on. Most recently, a couple of recent announcements as we sold some systems also to the U.S. Navy for their morale, welfare and recreation program, MWR, which is a program for sailors. This is actually military wide as well. Just to take care of the recreation and the morale of the troops, and U.S. Navy has the center, 68 centers nationwide at able basis. And so we sold systems, the first systems to that program for one base which can be expanded globally potentially. Again, good revenue opportunity but also just yet another way to increase our adoption and awareness across the U.S. military. So that's just a recent announcement. We also, just this week announced, we sold the first systems to the Veterans Affairs Department, the VA for Therapeutics, a bit of a crossover with our health care space. We'll talk about that as well. And then we're in advanced negotiations on the strategic acquisition, which, if completed, we believe, would create significant value for us and our shareholders. We'll talk about that as well. So consumer, defense and an enterprise, it's a third division that is coming up, repeat sales to Tesla on the robotics side, figure AI as well. You can think about industrial training, safety trading simulation. We sold repeat units to NASA, for example, the majority of our enterprise systems are going to research institutions, universities, research groups. So that -- those sales are growing as well. These are high-margin sales. We'll talk about that. And then healthcare is emerging as potentially 1/3 of big vertical out to consumer and defense, and we'll talk about that as well. And also recently, we got our 26 patent issued, 5 more pending. So I just want to reiterate that we have a very strong IP portfolio around everything we do. There's really nobody else at the -- I think, I believe, comes close to what we do. So diversified revenue streams, consumer, defense and enterprise all around our omni technology platform. Across markets, we try to have upfront revenues from hardware and make a margin there and then have recurring revenues from software afterwards, software licensing and so forth. Let's start with consumer. I'm not sure if many of you have seen our Quest trailer. I think many of you have seen our dental only one trailer. I'll show our Meta Quest trail a real quick of our Meta Quest product as you may not have seen that yet. So let me pull up a quick video just to set the stage. [Presentation]

Let me go back to the presentation here. And so that Quest launch, I mean, is off to an incredible start. And Meta sold about 20 million Quest headsets by recent estimates. There are about 6 million or so active users. So addressable market was expanded by an immediate 6 million users who, for the first time, can use our product directly with our existing headset and game. So our orders, as I mentioned in the beginning, our orders are up threefold, 3x since that Meta launch. So great momentum there. And I feel like we're only getting started even with our Meta collaboration. There's still so much more we can do. Now we're looking at joint marketing opportunities, potentially bundling our products together. We're only scratching the surface here, but it's a great momentum here with our Meta product on the consumer side. Maybe, David, now may be a good time for you to say a few words about production, and we're getting ready, of course, for the holiday so which is the most important season of the year and shaping up to be a great season for us. So maybe say a few words about since you're leading our global operations, but our production.

Thanks, Jan. Yes. I lost my connection a minute ago, I'm calling in from Taiwan. Not sure why that glitch happened, but I'll talk quickly just in case I get cut off again. But I was -- yes, thanks Jan, for the quick intro. When you were saying -- when Jan was saying that he and I are long-standing partners, I was going to jump in and say that a few weeks ago, it was our 13th anniversary of working together on the Virtuix, so we're in our 14th year now of working on this business. And I just want to always take the opportunity to thank our investors for your support. We've had many long-standing investors since the very early days and now with the listing, I guess, thousands more. And it just feels like -- even though it's been -- we're in our 14th year, it really feels like we're just getting started. I mean the listing is new for us, and it's just really fueling our growth. We couldn't be more excited about what lies ahead. So yes. So on the Meta, Lauren, you want to -- maybe want to jump in as well, talk about the Meta launch. My job is to fulfillment, the operations, the manufacturing. I'm also a hardware design engineer. So that's my role in the business. So as far as the manufacturing, we've got a wholly owned manufacturing facility over here in this part of the world. And we have capacity to deliver up to 3,000 units a month, which is -- which would be $100 million in revenue. So we have no constraints on capacity. We're just like full on ramp up those sales, drive that sales engine, that partnership with Meta and the other avenues that we're trying to do -- driving volume on the consumer side and then margins and recurring revenue on the Enterprise and defense side. I don't know. How is that outisde? Maybe over to you, Lauren, on stuff on Meta.

Absolutely. I cannot be happier with it. Meta has been a fantastic collaboration for us. Just to reiterate orders up threefold quarter-to-date versus the same period last year is a very positive result for the company. And we -- I mean holiday is really important on the consumer side. It's when people buy their big ticket items. We're gearing up for it now. And I am looking really forward to our holiday period and putting together some good offers for you guys.

Yes. Lauren, a question I often get is, how do we do our marketing? Maybe you can say a few words about our at social and influencer program.

Yes, absolutely. So we are really focused on digital marketing here, primarily through paid social and influencers and these 2 systems really feed each other. We pull a lot of our content from our influencer partners, and those become very effective ads through social. That's really our primary marketing driver. I see sometimes on our discord people commenting on our ads. That's great. That means it's working. So that's -- and then we have like some other supplementary things like we definitely go to events. We have other partnerships, but definitely, the really big driver for us is digital marketing and being D2C first. It's very important to get that right, and I think we're doing that.

Yes. Terrific. Lauren. A couple of more notes on the consumer side. I mean it's a gaming system first that has us exercise benefits and some of you have heard us an example before, but we have many users who use our product almost daily as a key way to stay active, stay fit, one user lost 40 and 4 months using it seems to be a key driver for many of our customers, including parents who want to get their kids off the couch. We work with all the -- most big game studios. We have great games, not also for our Quest system and announcing new games every month. And then the business model for our consumer product, it's DTC, direct-to-consumer, there's an upfront hardware purchase, which is around $2,500 depending on the SKU, $2,995 for our complete system with PICO. Our target margin on the target gross margin is 40%. We do aim to make a good margin on the upfront hardware purchase. It's not for everybody, of course. It's a fairly big ticket item, but it's the price of a gaming PC, connected exercise equipment. It can also become a monthly payments. We work with a firm and so it becomes a monthly payments starting to get around $90 a month or so. So there's an upfront hardware purchase, and then on a complete system with PICO, we do have a recurring revenue stream from selling games from our game store and from selling subscriptions to play online similar to Xbox Live for Xbox or PS Plus for PlayStation. So we used up our margins further with software revenues after the harbor purchase. All right, that was on the consumer side. Now let's talk about defense. We have a lot of early traction already working with all 4 major branches of the U.S. Military. I mean if you think about it, the military has always had simulators for aircraft flying. They have similars for vehicles, stacks driving. They never really before they never really had simulators for ground troops for inventory Until now, thanks to our technology. Now inventory ground troops can virtually walk the battlefields before fighting on it before putting boots on the ground, they can export a battlefield training, mission planning, mission rehearsal. So it's a really exciting capability for U.S. Military. So we're working, for example, with the U.S. Marine Corps, where we're the lead integrator on the development of an inventory fire team trainer, and I'll show you another slide there in a second. We also have a counter drone training system for Marine Corp reevaluation. For the U.S. Air Force, we have a first contract of Phase 1 silver contract for our Virtual Terrain Walk system, and I'll show that as well. And those are actual revenues, the first contract revenues coming in. And then we'll be submitting for a Phase 2 later this month. Phase 1 will actually be completed this month. And then we're submitting for a Phase 2 winter support of various Air Force bases and departments. And the Phase 2 is additional funding up to $2 million. So that's the back story here is that for all these initial contracts and awards and sales and projects, we're progressing those towards bigger contracts, bigger awards, bigger programs. also sold units to the Air Force Academy, Air National Guard, U.S. Army, Westport. And then U.S. Navy, I mentioned the sales to the morale, welfare and creational program could be expanded potentially to 68 basis globally. We also have a development agreement with the Navy as well. So a lot of initial traction as we are progressing those -- the momentum to bigger awards. Now at the bottom here is also an important note. As we've announced, we're actively looking at acquisition targets in the defense space. And we also announced that we're in advanced negotiations with one potential target that is at the top end of the revenue range, $10 million to $50 million. We're looking at this potential target is at the top end of the range. So it would take or if completed, it would take our revenues to a whole different level with a step change. So it would be a major relieve, it could be a major catalyst for us. And the valuation and a financing structure that we believe, again, if completed, could create significant value for us and our shareholders. and could be a major catalyst for us. Not only on the revenue side, which is significant, takes us to a whole different plane, if you will, but it's way beyond revenues. One other important part of it is access to contract vehicles that we would acquire. For example, GSA or Oasis Plus, those are contract vehicles that are commonly used to sell goods and services to the government. Now to obtain access to those organically, that would take a lot of time. So we would speed that up by this acquisition. We'd also obtain past performance. Past performance is very important. If you want to get a $100 million contract with U.S. government or a $50 million contract, they will look if you've done a $30 million contract or a $10 million contract. And what's your past performance. So you can acquire that through acquisitions, which will be part of this as well. And then access to sales channels and access to the right people to show our core technology, our only technology to. And so this could really accelerate our momentum in the defense space. And to get to those bigger contracts, those bigger programs, even for our core technology, our omni technology. And so it's a really exciting development, which, of course, the revenues are paramount here, it's a game essentially again, if it's completed, it's a game changer for us. We'll keep everybody posted on that. Nothing to announce just yet, but that's just something we're working on. Here is that inventory fire team trainer that we're developing for TCOM. It's a 4-person system for mission rehearsal. We plan to bring the system the first system to Quantico in the fourth quarter of this year. And if successful, it could potentially be rolled out or cross trading centers nationwide. Just to give you a sense of scope here, a training system like this, 4 persons, typically, you may get a 5-year contract per system. Yes, could approach or exceed $0.5 million per contract. Again, just illustrative numbers here. And then it could be rolled out to, let's say, 20 trading centers for the Marine Coronation wide have you a bit of sense of scale of this potential project as we try to progress that to the next stage. We also have our counter drone training system that we've been showing. We just showed it this week to the U.S. Army at for Benning as well, and it's also an evaluation by the Marine Corps as well. Counter UAS counter drone training is a top priority for western militaries, as you can imagine. So we had a movement piece to that. Let me show you a quick video of our demo here, one second. [Presentation]

But that's our counter UAS lead tech both the Marine Corps and the Army right now. And then we have a virtual terrain work system that forms the basis for our award with the Air Force, or SBIR Phase 1 award. And that's also using that AI-driven to reconstruction technology that I've talked about in the past is forming a big part of this. And that Phase 1 will be completed this month. And then as I mentioned, the goal is to progress advance to Phase 2, which is up to $2 million in additional funding. Let me show you a video about our terrain walk system. This will be the last video I'll show today. [Presentation]

Yes. So that's our Virtual Terrain Walk system. Again, there's nothing like it. It's a revolutionary capability that the military is very excited about. And again, to give a sense of potential scale here, again, illustrative numbers only, but we could make a system like this for 10 people connected for mission planning and a system like that may typically goal for $0.5 million to $1 million or so plus recurring revenues over a 5-year contract, maybe $1 million to $2 million over the life of the contract, you get illustrative numbers. The U.S. Army alone has 117 battalions that can use a system like this. I'll just to give you an example. Then we have the Marine Cor, the Air Force, Allied forces, NATO, you name it. So the defense opportunity for us is very substantial. And it takes time to go to the bigger programs. If ones to start to come in, it's a game changer, right? So that's why we're spending a lot of time on defense. We have a lot of traction in that space, a lot of potential and could result in significant revenues for our company in the future. Then a few words about enterprise. Our enterprise revenues are also growing with our high-margin revenues. We target a margin of 70% or more on our enterprise sales. You can think about industrial training, safety training. As I mentioned, we work with NASA. We've sold repeat units to Tesla for the Robotics, Optimus Robotics division, Figure AI as well. And there's various other applications and research institutions. And then healthcare. Healthcare, I'll talk about that a bit more here. it could become a third big vertical outer consumer and defense, specifically in the field of therapeutics, cognitive therapy. We're working with a couple of research institutions including Rodgers Windlab, specifically around autism therapy for children. And for autism therapy for children, VR, virtual reality, is already used and is already reimbursed in some states to help children with live skills crossing a street, going to the supermarket. And so adding the movement component with the omni seemingly can increase the engagement and the efficiency and effectiveness even more. And so that's what we're working on. And we also have a partnership with Circa Therapeutics. We've delivered the first systems there. They've announced plans to expand to 100 treatment centers nationwide. And U.S. alone has about 12,000 ABA therapy centers that could buy our systems as part of this is cognitive therapy, neurodiversion therapy. I've also announced our first sales to the VA, the Veterans Affairs Department. The VA is actually also quite cutting-edge using virtual reality. They have this VA immersive program. that is now across 145 VA facilities using virtual reality for PTSD treatments, pain management, cognitive therapy behavioral therapy. So the VA is actually pretty forward leading in that regard. And so that's another opportunity for us for meaningful revenues as we expand that health care vertical. So we'll see what it leads in the future development that we are supporting and could become a big vertical for us over time. A few words about our financials. These are the financials from our last fiscal year, where our revenues were still, I'd say, modest but growing. We reported $4.2 million in revenues last year. but we're aiming to grow that, especially with our consumer growth, where we're seeing substantial growth right now. Our gross margin was up to 30% in the last quarter. We're not profitable yet as we're investing right now in our growth, in our expansion. Remind you that a large part of the losses here are noncash. Our adjusted EBITDA last quarter was about negative $3 million. But ultimately, our key goal and drive is to go to profitability to become cash flow positive. That's the key goal of the company. That's what we're working towards. So how do we get there? And this is the last slide, is through this multi-use growth opportunity. We can build on that 30% gross margin of the last quarter and scale our revenues drive consumer growth, thanks to our made-for-me, partnership collaboration. There, as I mentioned, we are seeing 3x threefold order growth, which is very exciting. Then the fence, advancing our defense traction to larger contracts, larger programs, that's a key focus. The acquisition, I mentioned the potential acquisition which, if completed, will be really meaningful would take our revenues to the $50 million range at a valuation, again, at the valuation and financing structure that, if completed, we believe could create significant value for our shareholders and also accelerate our momentum in the defense space. So it's really consumer kind of high-volume consumer, high-value, defense and then supplementing that with enterprise, high-margin enterprise sales where we're seeing some traction as well and potentially healthcare is another big vertical coming up. So that's our key goal is to drive towards profitability. Then the question is, okay, when can we expect that? And how do we get there? And we really believe we'll turn the corner on profitability is when there's larger defense contracts may start to come in. And that won't be this fiscal year. That's a bit of a longer sales cycle. But we could aim to potentially see some of that next fiscal year at the earliest. And so we're where does it lead us from a cash position? That's the next question. Well, last quarter, we announced cash in the bank of $7.4 million, plus additional warrant exercises for $1.2 million after the quarter end. So pro forma, let's call it, about $8.5 million. That takes us to next year. And how do we go from there? Well, the good news is -- and this is one of the reasons we went public as a company is to have access to the public market -- public capital markets. And we have a lot of good options there, we believe. And I'll give us a couple of examples because I get this question a lot. A highly common way for small cap companies like us to tap into the public company capital markets is to put an ATM facility in place at to-market facility where you sell equity at the market under an S-3 registration statement, that would be a fairly common relatively inexpensive and efficient way to raise more capital. That's something we could do next year once we're S-3 eligible. This is just, again, an example. Another thing we could do especially as it relates to the acquisition or the potential acquisition is put a bridge toward the ATM in place, which could be, for example, senior secured notes, senior debt trade debt. That's another option. Again, these are just exams that I'm giving to paint a picture that we have options. We have options and we believe we're very confident that we have good options here. I'll meet regularly with our Investment Bank Maxim. I met with our financing partners treatable this week. And so that's the advantage of the public markets. We have those options to get -- to bridge to profitability and to execute on our plan, which is accelerate and drive our consumer growth, advance to bigger contracts in the defense space and then complete a potential acquisition, which could be game changing as well. So -- so let me just sum it up here in summary. I mean, look, it's a very exciting time for all of us here at Virtuix. We're seeing our orders growing threefold since the meta launch, which is very exciting for us. We have a lot of traction in the defense space with sales to and awards and projects with all 4 major branches of U.S. government, Department of Defense as we progress those to larger contracts. We have the spending potential acquisition which, as I mentioned, again, if completed, would take our revenues potentially to the $50 million range, true game changer and again, at a valuation and financing structure that have completed, we believe, would drive a lot of growth, that would be a big catalyst for us. And then behind that, we drive our high-margin enterprise sales and maybe healthcare as a big third vertical. Look, we have a lot -- in the pipeline, if we can execute an everything in our pipeline this year, I believe we'll be in great shape. We're staying very focused mostly on consumer and defense, but we're laser focused on growing our revenues and driving towards profitability with all the opportunities we have in front of us. So thank you very much. I'll leave it at that, and we'll open it up for questions right now.

All right. Right off the bat, Logan has a question about Tesla and their usage of Omni One. Are we able to talk a little bit about some of our enterprise applications and what the feedback has been like?

Yes. On the robotics side, it's an interesting application where we've showed video of this earlier on as well with the University of Central Florida where somebody is on the omni wearing a virtual reality headset and see in real time what the robot is seeing and then walks on the Omni -- sorry, Lauren, you're keyboard is very loud, sorry. And walks on the Omni and steers the robot in real time by walking on the Omni. So it's teleoperation of robots and data collection. So it's nesting opportunity. We'll see how far that leads but we're getting some traction there with repeat sales to Tesla and other companies. A question here for you, Lauren. Michael, go ahead.

Yes. So Michael asks, have you considered collaborating with Twitch streamers to reach their millions of followers? I mean the answer is yes. We work with a variety of creators and streamers. Candidly, we tend to prioritize YouTube because the content has a longer shelf life for a searchable long term, whereas you have to catch a stream in the moment. And so especially when people do research, Omni One is a highly researched product. It's an expensive product, so people like to take their time and learning about it. So we tend to favor longer shelf life content. But we do work with streamers. And if you search on the one, you can get a lot of content we've done with various creators.

Yes. I'll address the question here from Andre asking if we triggered any covenants of the company. And the answer is no, not that I'm aware of.

All right. And then a question here from Jeff. Jeff asked, what about working with Apple VR headset partnerships or other partnerships? Jan, you want to comment on that?

Yes. I mean we work with really all headset manufacturers, including HCC, PICO, Meta. Now Apple is a bit of a different animal. They quite ignores the gaming space. I mean their headset doesn't even have controllers and games need to play games. So they're doing their own thing, really excited about their technology and also really excited about the fact that we continue to invest billions of dollars into this space. And we'll see if we can have a close relationship in the future. But right now, they're kind of staying away from gaming, which, of course, on the consumer side is our bread and butter. So we'll see how that evolves over time.

And I answered this question, but I think it's worth as answering publicly. Cedric asks about how a firm works and if we're getting revenue for that today?

Yes, go ahead, or can you answer that?

Yes, sure. So a firm is our partner that we use to offer monthly payment options. And we do get revenue from them today. The way it from works is that the customer gets what is essentially a loan from a firm. Virtuix receives the entire purchase amount upfront. And then we get -- so it's not a monthly recurring revenue. Monthly recurring revenue really comes from things like our software sales. But we do get money from that upfront minus the financing fees. And it's been a very powerful tool to help customers afford Omni Ones and very popular for our customers to use the firm.

Okay? Thank you, Richard, for the shout out. Good to see our long-standing investors on the chat as well.

So a question from Robert here. And we'll start with Jan and then David, I think it would be good for you to chime in as well. He wants to know if we're working on an Omni 2?

Gosh, I'm not sure we can answer that, Lauren.

Well, maybe not specifically Omni 2, but maybe we can talk a little bit about that we're not sitting still as a company.

For sure, yes, we continuously improve our products. Oftentimes, we do it, there's a running change, running quality improvements and so forth. So we continuously work on new items. We actually have a couple of new items in the pipeline as well that we'll announce soon. So yes, we would definitely continue to evolve our technology, but can't really comment on the bigger development road map at this point.

All right. And then I have a question from Mark that I answered, but I think it's also worth repeating. Mark asked what kind of boots on the ground type of direct sales are happening? Are we -- do you have a sales force? Are we sending them off to campuses, gyms and gaming shops? And so as a D2C company, we're mostly supporting ourselves by events where we can demonstrate a large amount of Omni One sales to a concentrated amount of people. Having a large sales force across the country is a very costly endeavor, and we try to control our costs by focusing our efforts where we can have the most impact. But we also have tools to reduce the barrier for buying products like Omni One. And so we offer a very generous 30-day risk-free return policy to help make sure customers are comfortable buying Omni One and testing it out and feel good about their purchase.

Okay? Question about Andrew about how the 3x order growth translates to sales. Well, we report our sales at the next earnings call. The Omni Quest -- Omni One for Quest product is a bit lower priced than our complete Omni One system, something to keep in mind. So we'll see where our revenues end up at. The bottom line is, we are obviously seeing strong growth with our launch with Meta that we're really excited about.

And then a question from Richard. He wants to know about any feedback around B2W. And so I would love Jan, if you can explain a little bit about what Super Phase 1 means for us as a company and what that path is into SBIR Phase 2 and 3?

Yes. Yes. Yes, Phase 1 is just the first phase. It's actual revenues, but it's not very large, but it's a first step. A lot of these military sales cycles, you start with the first step and then you go through several gates. This is just the first gate and then hopefully going to a Phase 2. Phase 1 is really more of a validation phase. Phase 2 is where you start to actually deliver systems or a test system. And as I mentioned, it could be up to $2 million in funding. And then Phase 3 with SBIR is your sole source almost unlimited funding source up to $100 million or so. We're also the sole source contracts, so the buying entity does not need to compete it out. And that's what a SBIR process and SBIR vehicle is very interesting. So as with our other projects, we're progressing these towards larger and larger awards and programs, and we'll keep everybody updated as we progress through that process.

Great. And David asks about steam frame. Are any steam frame news we can share?

Oh, yes. Yes. Yes. I mean we love the team frame certainly we're gamers and very excited about the...