Unidentified Analyst: It’s a noncash expense? Okay. Yes. All right. Okay. And the gross margin decline that you’re looking at for the current quarter. Is there some cost structure associated with that in terms of employees that recently have left or other things that are going on, what you’re looking at less sales that you’ve expressed in your release today so that obviously could easily have an effect on the gross margin decline. But is there something else going on in terms of the cost structure associated with further development of Gemini-2 relative to other quarters. What — how does it — what’s the comparison in terms of cost structure relative to what you’ve done on Gemini-1 and now you’re doing in Gemini-2.
Douglas Schirle: Well, Lee-Lean can talk about your last question, but — in terms of the gross margin, the layoffs really didn’t impact it that much. Most of the layoffs other than a couple of $100,000 are all in operating expenses, not cost of goods sold. The gross margin is lower because the revenue is lower, and we still have fixed overhead expenses that need to be covered by the margin on sales. So that’s why the gross margin number is down. The product mix is still a good product mix with good margins associated with each shipment.
Unidentified Analyst: I see. Okay. Now last question would be back on the progress being made in Gemini-2. This has taken a long time for the company to really generate customers giving you orders and expanding what they are going to use it for. Do you feel like you’re very close now in that by the end of the current quarter, say, the end of March, that you’ll be able to actually have orders in Gemini for Gemini-2 going forward or is — or do you envision that it’s still going to take more time into the — in the June quarter or the September quarter. Can you kind of give us an idea of what you’re thinking about in terms of really starting to spin out some revenue stream here?
Douglas Schirle: Yes. So at this point, we’re still seeding the market and building the pipeline. As I mentioned, we shipped a couple of systems last quarter. We’re anticipating to ship a few more, and it’s building that pipeline now. And so we don’t have any production orders at this point. It’s still building that pipeline.
Unidentified Analyst: I see. Okay. And have you been affected negatively on the tremendous storm conditions in California from the middle of the state up. Has that created any kind of problem for you to deal with?
Douglas Schirle: No, not at all.
Unidentified Analyst: Okay. All right. Okay. Well, I think that this has taken a long time in terms of years to get this action going forward on to Gemini-1 and into 2. And if something’s got to really start to happen here in terms of getting — and the interesting thing is that with this decline that is being seen in your business, generally speaking, I mean when I say your business, I mean, the general business associated with the chips, it would seem like what has been happening in the last couple of three quarters generally for the industry, would really put you in a position to take advantage of really getting up on track and going with some business that would be developed from what you’ve been trying to accomplish in, say, the last year. Can you say anything about that?
Douglas Schirle: I’m not sure we follow the trend of thought there. I mean, certainly, we’ve had the general slowdown in our legacy business, and we’re continuing to pursue the new products, but I’m not sure we followed that your trend of thought there.
Unidentified Analyst: Okay. Well, what I’m just saying is that with the business having fallen off and trying to see ways of taking advantage of moving into a broader customer base as you’re starting to move forward into the Gemini-2 area that may be the fact that the industry has got to come out of this decline that it’s experiencing. But with you having something new to bring to the market that we — it would be possible for GSI to really take advantage of maybe some momentum because of what’s happened in the industry going downward and that if you’re really getting close now to introducing innovations that you’ve been working on in Gemini-2, I would think that the shareholders of your company should be certainly looking forward to a turnaround in revenue stream beyond the first quarter — beyond this current quarter.
Douglas Schirle: Exactly, yes. Yes, we do anticipate — even in the legacy, we anticipate a bounce back by the middle of the year as far as the revenues go based off of input from customers. And again, it’s just we need to continue the process with the APU, continue the development we’re doing with researchers with the government applications and continue to just move forward. It’s a process.
Unidentified Analyst: I see, okay.
Lee-Lean Shu: In the marketplace, we are in. We see the Gemini-1 has a better solution than all the competing products. And the Gemini-2 is the least and bounds better than the Gemini-1. And we are pretty confident that will create the market leader for the — in the area we are in.
Unidentified Analyst: I see. Okay. Thank you very much.
Douglas Schirle: Thanks George.
Didier Lasserre: Thanks George.
Operator: As there are no further questions at this time, I would like to turn the floor back over to management for closing comments.
Lee-Lean Shu: Thank you all for joining us. We look forward to speaking with you again when we report our fourth quarter and full year fiscal 2023 results. Thank you.
Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.
