Christopher Souther: I just wanted to kind of get a little bit more color around focusing more on specific kind of higher-volume customers. Does that mean there are specific subsectors here that are very small today but might become kind of volume that you might miss? Like, how do you evaluate potential where some of the stuff is pretty kind of cutting edge, I guess you could say as far as the customer base?
Raj Talluri: Yes. So what I’ve seen in my history of the 30 years I’ve been doing this kind of consumer electronics chip business is that at this stage of the company, it’s very important that we focus on a few customers that can drive very high volume and satisfy the requirements of those customers. Fast charge, cycle life, energy density, form factor, how they’re used, how the PMIC interacts with that, how they charge, how they discharged. Once we get that nailed and we are able to have a few of those customers drive meaningful volume, we now will have scale. And then those exact same cells, we’ll have the ability to sell them into all the other markets, which may not take as many of them, but they are more willing to compromise on the form factor of the battery and so on.
And those will be some new cutting-edge markets that could come up, ABR and a few other ones like that. But then we can then optimize to those as they get bigger. So the idea is to get your product ready for the vertical markets, get to volume, get to scale, get to the right deals, pay for our manufacturing lines, then use them to see this broad market and then grow into those markets. So I expect in time, 80%, 85% of our business will probably be in large verticals, and 20%, 25% will probably be in a broad market. So it’s a vertical first, horizontal second strategy.
Operator: Our next question will be from Tim Moore of EF Hutton.
Timothy Moore: The question I had was just about the purchase closing of your recent transaction for the acquisition. When do you expect it to be fully integrated to achieve your forecast cost savings? And separately, how many months maybe until you can beat up the battery development cycle there?
Farhan Ahmad: Yes. So I want to be clear, the cost savings that we have talked about is they are dependent on the quoting capacity and how we are utilizing that. So the shift to the coating capacity and the cost savings from that are related to how the manufacturing lines ramp up. So most of those cost savings, you will see it in 2025 and beyond that. And we are keeping RouteJade pretty much as a separate entity for their existing business. Where we are focused on is primarily on using their coating and making sure that all the innovation in coating that we wanted to drive for cost reductions and also for yield improvement in our manufacturing processes that we are really executing towards that plan. And so yes, like the things there are going well, and we are on track to execute towards ramping with RouteJade in our manufacturing in 2025.
Timothy Moore: Just out of curiosity for the accurate Meditech Mini, how many months in advance would you maybe start to recognize revenue before it starts selling in CVS, Walgreens and Walmart?
Farhan Ahmad: So look, what I can tell you is that our revenue recognition is not contingent on their shipments. But when we ship the batteries to them and we get paid for it, we will recognize revenue after fulfilling all our obligations. We do expect those to start selling sometime in next year. I don’t want to be too specific on that, but yes, like that’s what we know.
Timothy Moore: My last question is a comment you had on the last earnings call was that capital expenditure next year will be higher than this year, which makes sense, given all the great strategic expansions and moves you’re making. Is there any way maybe to give us a sneak peek maybe by how much higher the CapEx might be next year, now that we’re about seven weeks away from the year-end?
Farhan Ahmad: So look, we are not guiding next year CapEx at this point, but we will control CapEx and are spending very tightly and spending as needed. Right now, we are not expecting CapEx to be up year-on-year next year, and we will continue to manage it tightly.
Operator: There are no further questions at this time. With that, I’d like to turn it over to Dr. Raj Talluri, for closing remarks.
Raj Talluri: Yes. Thank you all for listening to our earnings call, and thank you for all the great questions and looking forward to talking to you next quarter. Thank you.
