Shervin Z: All right. Great. Makes sense. Thanks guys.
Sam Rubin: Thanks.
Operator: The next question is from Glenn Mattson with Ladenburg. Please go ahead.
Glenn Mattson: Hi. Yeah. Thanks for taking the question. So, it was about seven months or eight months ago that China made the announcement of the export ban for Germanium. So, at the time, I think, you said, you might mentioned a timeframe of, like, how long it takes your customers to design in, your alternatives kind of nine-month to 12-month timeframe and so, I guess, I’m curious about how that’s going and if there should be some expectation of that to start to kick in kind of in the second calendar half of this year and that may also relate to the to the one customer didn’t renew yet on the backlog side just to, you could use him as an example, but just across the customer set in general, can you just give us a sense of how that process is playing out.
Sam Rubin: Yeah. No. That’s a great question. Thank you. It’s going really well. I mentioned a couple of customers as example. One of them is that largest customer for the sporting part. Typically, our annual orders from that customer have been between $4 million to $6 million as much as $6.5 million, I think, on one year and we haven’t renewed that. Our expectation now is really for — the entire product line of that customer to possibly convert to using BlackDiamond materials. What we’re seeing is that, things have gone got an even worse with Germanium. At first, I think, many customers were still accessing Germanium through inventories to many maybe was making its way out of China in different ways and different creative ways, let’s say.
But that is decreasing significantly. And as of now, from what we know, China has given zero export licenses to any Germanium at its final destination at the U.S. So they’re very, very specific in sort of what they’re going after there. And so we have two large customers for handheld devices, gun sites, binoculars and so on. They probably have around $10 million of potential revenue between the two of them. Both of them are working very hard to convert over. Next week I think we’re actually shipping some more samples to them. One of them already converted one product, sorry, which I mentioned at during the SHOT Show. They announced it as a new product and they also made it very clear at the SHOT Show to ourselves and anyone else that was asking that all new products are being designed only with BlackDiamond now.
So I think we’re going — we’re doing very well. I wish it could be faster than the time it takes. But unfortunately, doing some of those also requires some of the capacity and capability that is used for day-to-day production, and we can’t disrupt that too much. So it’s a balance we play.
Al Miranda: But I think, sort of, Glenn, it took — the Chinese made the announcement in July. And I would say, Sam, you can disagree. But it took until maybe November and December for the customers to start feeling…
Sam Rubin: Yeah. Absolutely.
Al Miranda: … payment of that announcement and start the scramble looking for a solution.
Sam Rubin: Yeah.
Al Miranda: And our conversations with those customers didn’t give them confidence that they were going to continue to get Germanium, right? So when it was clear that we weren’t going to solve, weren’t going to be able to solve their Germanium problem. That prompted them to take action. But it took — I would say, took…
Sam Rubin: Yeah.
Al Miranda: … a good six months before they realized it was real.
Sam Rubin: Yeah.
Al Miranda: Which is why our largest customer first wanted just one product redesigned. But as we were working on that, they started realizing how difficult the situation is and immediately switched over to saying, let’s redesign everything.
Glenn Mattson: Right. Right. Okay. Great. That’s very helpful on the backdrop. And I don’t know if this would be for Sam or Al, but could you give us a sense of, as you look at your back half of your fiscal year, you mentioned in the prepared remarks little about European recessionary conditions and things like that. Can you just give us a sense of how you feel about, well, all the factors coming together with the potential, I don’t know, if there’s any potential further disruption from the lack of supply or the supply drying up on the Germanium side or — and then maybe the new designs not kicking in yet or maybe there’s some revenue coming through on the Mantis side of things like that. Can you just give us a general sense of how you’re feeling about the revenue topline in in 2H versus 1H…
Sam Rubin: Yes. So it’s interesting that the situation, the softening in Europe is really more around the visible optics where there’s a lot more competition globally and a lot of price pressure, a lot of production capacity and all that kind of good stuff. And those products tend to have industrial applications that sort of deliver next or the — deliver more to consumer oriented products and that’s where we’re seeing the softening. The infrared side, because the infrared components, even without the major contract, on the infrared side, we’re still seeing growth in Europe and in the U.S. and demand in Europe and US for infrared components and the assemblies and solution type start of the business. But where we’re seeing the sort of the economics impact is on the visible component side.
And again, they tend to lead towards a more direct path to a consumer product. So that’s where we’re seeing it in Europe. And I don’t have a crystal ball and they don’t say the recession word. If you Google it, the Europeans are like, we were a year ago. Nobody wants to say the recession word, but their economies are contracting.
Glenn Mattson: Right. Right. That’s helpful. So, then when you factor that in, plus all the other moving parts and when you think about the topline outlook, can you give us any general sense of directionally how you feel about the second half versus first half? And that’s it for me.
Sam Rubin: So, my gut tells me that this past Q2 was the soft this quarter we’re going to experience. So, in Q3, we should see a little bit of an uptick and in Q4 a little bit of an uptick. Again, it’s the visible components that’s sort of what we worry about and you kind of nailed it with that. But they’re in decline regardless. So, it’s just happening a bit faster than we would have predicted six months or a year ago.
Glenn Mattson: Okay. Great. Thanks.
Operator: [Operator Instructions] The next question comes from Gene Inger with ingerletter.com. Please go ahead. Mr. Inger, your line is open. Do you have it muted on your end?
Gene Inger: Yeah. You hear me now?
Operator: Yes. We do. Thank you.
Gene Inger: I apologize. I muted it as a courtesy. Sam, I hope you’re feeling better. Hi, Al, as well. And my first question I’d like to start is something you haven’t touched on, which is the Annual Meeting and the paperwork that was pending due to problems from the previous management before you guys began and an enormous task of turning around this small company. And I’m wondering if you can tell us if all of that is not of concern to shareholders?
Sam Rubin: Yeah. Absolutely. Thanks. I appreciate it. Definitely could have touched on that. I’m very, very glad to say that it’s all completely resolved now. And to recap, it was pointed to us by some external group that there were some problems in the registration of the company that went back all the way to 1995 when a 7-to-1 split or reverse split was done and was done incorrectly or so. And so we had to postpone the Annual Shareholder Meeting to it, file with the Delaware Court, Chancery Court, for a correction of the registration since we couldn’t go back and locate all shareholders from 1995 to have them revote that. All of that is behind us. Last week, the day before the Annual Shareholder Meeting, the court ruled on that, fixed the registration and we’re all done. We’re in very good standing now. And I think I can say that at this point, every single issue that we have found in the last three years has been fixed.
Gene Inger: Good. Very briefly let me ask you a couple more questions. One, Scott’ Faris, Chairman of the Board and I appreciate the new Board members, by the way, the former major general, as well as a business manager, I believe, brought over from Luminar. A, are you bringing in more people intentionally from Luminar? And B, is there any linkage between LightPath and the private company that Scott is the CEO of called Infleqtion, and I mention that, because the Pentagon is in the process of jump-starting several key applications, I wonder, and some of that includes quantum computing, photonics, and I wonder if this is or can involve LightPath in the future?
Sam Rubin: Yeah. Well, first of all, we’re not poaching specifically on Luminar, and I don’t think we’re targeting specifically. It does happen to be that Luminar has recruited some great people over the years and there are some opportunities that have come up in which we recruited people that were in the past in Luminar, even the near past or the long-term past. But some great people joined us from there. And secondly, as it comes to Scott’s new venture, which is extremely interesting and I’d encourage everyone to take a look at that, Infleqtion. Like many things that is extremely heavy on photonics and quantum, all things quantum, quantum sensors, quantum computing, quantum communication, they are all very photonics oriented and driven.
