Vislink Technologies, Inc. (NASDAQ:VISL) Q3 2022 Earnings Call Transcript

Vislink Technologies, Inc. (NASDAQ:VISL) Q3 2022 Earnings Call Transcript November 15, 2022

Vislink Technologies, Inc. misses on earnings expectations. Reported EPS is $-0.06 EPS, expectations were $-0.01.

Operator: I would like to remind everyone of the Safe Harbor statement referenced in the SEC filings. The Private Securities Litigation Reform Act of 1995 provides a Safe Harbor for certain forward-looking statements, including statements made during the course of today’s call. Statements contained herein that are not based upon current or historical facts are forward-looking in nature and constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. Such forward-looking statements reflect the Company’s expectations about its future operating results, performance, and opportunities that involve substantial risks and uncertainties.

When used herein, the words anticipate, believe, estimate, upcoming, plan, target, intend and expect and similar expressions as they relate to Vislink Technologies, its subsidiaries or its management are intended to identify such forward-looking statements. These forward-looking statements are based on information currently available to the Company and are subject to a number of risks, uncertainties and other factors that could cause the Company’s actual results, performance prospects and opportunities to differ material from those expressed in or implied by these forward-looking statements. For a more detailed discussion of some of the ongoing risks and some uncertainties of the company’s business, please refer to the company’s various filings with the Securities and Exchange Commission.

Gabrielle Bajarano: Hello everyone, and welcome to Vislink’s quarter four earnings call. My name is Gabrielle and I will your host for today as we navigate the numbers and actually assisting you to navigate today and also presenting, we are joined by Mickey Miller, CEO and Mike Bond CFO at Vislink. And they are going to be giving us the much anticipated rundown quarter four. So welcome gentlemen. Thank you.

Mickey Miller: Thanks Gabriel. It is a pleasure to be here. Good morning. Good evening. Good afternoon, to our global investor base. Very thrilled to be here. It has been a tough quarter. We will walk through it about what is happening in the market, but also what we are doing to improve this business continue to get the results that we all want as investors in the company.

Gabrielle Bajarano: Absolutely. And you know I’m so excited because we have got Mickey here in studio, but we also actually have Mike dialing remotely from it looks like I don’t want to guess. Maybe, it is Hawaii. Where are you in from Mike?

Mickey Miller: He is in San Diego.

Q&A Session

Gabrielle Bajarano: Oh he is in Sand Diego. Fantastic. Alright, well, you know what? We have got a lot of audience who want to go ahead and get into the quarter four run down. We have got a lot of insight to get into today. So why don’t you go ahead and take us off Mickey.

Mickey Miller: Great. Well, I will go right through. You heard the Safe Harbor earlier. Again, for our new investors, our mission, we have the privilege of creating and building technology and solutions for content owners and content creators, as well as providing solutions and technologies to those in uniform to protect and serve us. Our solutions allow the content to be more immediate take proactive action. So we understand that this is a privilege and we continue to build this business in support of those, what we believe very noble goals. For our new investors also, our business is largely between three segments; sports, news and entertainment and military government, which our satcom business is are part of. When you look at quarter is very different than our last Q3 of 2021.

This quarter, almost 60% of our revenue was through our sports, news and entertainment channels and customers and 30% was in our military government satcom. A year-ago it actually flipped and we will go into the detail of why that changes has happened largely due to a military project that we had for Afghanistan, which has ended since Afghan exit. So we will go into that more, but these are the areas that we support that we bring our technology to help to improve whether it is bringing Tier-1 events like the Super Bowl or F1 or any amazing event to broadcasters and consumers globally or providing technology that allow air to ground communications that happen to take proactive action for those in uniform.

Gabrielle Bajarano: Well, before we get into the next slide. I actually do want to remind our audience that, as we start to go over this presentation, you are welcome to drop any and all questions into the chat, so that way you can get them answered today by Mickey and Mike. You are going to have your expert to be able to answer your questions directly. This chat will be monitored by Vislink, so go ahead and drop your questions in there and we will take them into review and just pick the best ones from there. So that is something to keep in mind as we go through this presentation. And Mike, are you available to take us onto the next slide? It looks like he might not be able to hear us. So Mickey, we do have this next slide here. Would you be able to take that over for us?

Mickey Miller: Yes, absolutely. So the revenues for Q3 were 7.1 million compared to 6.8 in Q2 in the prior quarter. Prior year quarter we did 11.1. In that 11.1 we had about four million as part of that military program in Afghanistan. We saw incredible growth in our sports and entertainment for two reasons. One, post pandemic. We have had resurgence in live events, and it is not just your traditional live events, but the insatiable demand for all types of content we see in many forms. Secondly, the technology improvements or new products that we added allowed our customers to upgrade their technology and do a technology refresh. So the combination of that allowed us to grow significantly in the sports and entertainment area.

In the first responder market, it was challenge, as you remember, last year in the U.S. the defunded police efforts were very strong. We have seen that pendulum swing the other way now. We saw our order book for government and first responder happened quite extensively in the last couple weeks. So we expect to see that continue. Everything that we hear from our government and state local customers is that the budgets are there and they are looking to deploy this new technology. And from a new technology perspective, we introduce our AeroLink product, which is our now new downlink, both COFDM 5G and Mesh product. We introduce that in March. And the amount of interest in that is tremendous. As an example, we have over seven programs that are in our funnel that are over $500,000 in valuation.

To put that in context, between 2016 and 2021, we had a total of three programs above 500,000. So right now we have seven doubled what we had over the last five years. So we are really excited about what this product brings to us and the opportunities that it brings for our customers to do their jobs more efficiently. Our Q3 net loss attributed to common shareholders with 2.7 million or $0.06 per share, and that was compared to 676K or $0.01 per share last year same quarter. Our EBITDA was negative 1.9 compared to one million positive for Q3 2021. We are not happy with these results. A lot of activity, which you will find out more to continue to position ourselves for A, growth and for B, profitable growth, our margins remain strong at 49%, and we enter the quarter with 24 million in cash.

Do we have Mike back yet?

Gabrielle Bajarano: Fantastic. Alright, Mike, we are going to have you take it away to slide three. We are ready for you.

Michael Bond: Good morning, everyone. Go to market efforts. This has given us an increased ability to address specific verticals in customer markets. We have also integrated mobile viewpoint and Vislink product portfolios and engineering teams. We have revamped our service organization and pricing model to improve customer experience and increased revenue. And we have gone about starting some cost reductions to reduce our breakeven even further. Our goal is to reduce our breakeven even by another 10% to 15% and we expect that to yield results into first quarter of next year. Some of the measures we are taking are head account reduction, footprint consolidation. We are consolidating some of the factories in final test and assembly areas that we have to reduce footprint, reduce real estate costs and we are streamlining our process and procedures.

We are though adding some additional resources in our sales area and our go-to-market model and we are augmenting and beefing up our engineering teams, so we can continue to introduce new products. This year we will go on a very ambitious project to convert to a new ERP system. Right now, we have three separate systems. We will convert that to one and that will help us to drive efficiencies across the organization. We are successfully completing a pilot run of our new product AeroLink. This positions us very well to execute on increased opportunity that we will see – that will fill our funnel over the next couple of quarters.

Mickey Miller: Okay. On the new product announcements, we had some incredible products announced this past quarter. Our 5G for live event production solution, what that does is bring 5G, the new 5G, private 5G to our solution set. We are the only company in our industry who has bought cellular 4G, 5G, proprietary COFDM solutions and 5G private networks. Now we will see this fold out in many ways. I think it will be country-by-country. There are some countries that have spectrum available to use 5G private networks and we are actively involved in those. We had two trials in the past quarter one with the Commonwealth Games in the UK and one with a Premier League Rugby event in the UK. So we are very confident with our – again, adding this would be a product that evolves overtime as private 5G networks become more available.

In addition to that, we introduce our Cliq that is a new OFDM mobile transmitter that is used for many use cases, including drones, body worn cameras, helmet worn cameras in some cases, but it gives a lot of flexibility both in nil gov markets as well as in live sports and entertainment to create again those real, immersive and clever shots that can bring a whole new perspective to the event or also bring information to make decisions with. And then lastly, example our AI capabilities. We developed our AI Clipping Tool, which is basically a software tool that allows you to – AI will watch a game and then create the highlights from that game and immediately send those out on your favorite social or even linked NFT. So it is very exciting what we are doing both from the hardware standpoint, but more importantly from the software that rides on top of that.

So on the live event production side, we saw our revenues grow 42% quarter-on-quarter from prior year, that is because of our new products that we have introduced over the last year as well as live events coming back in a bigger way and new event, new types of sports. As I said earlier, the demand for content is (Ph) and we allow content producers, content owners to do that in a fashion that people love and enjoying can really experience the event in much different way. We see new is where Tier-1s are not only ones producing content, but Tier-1, Tier 2 events, Tier 3 events you see high schools, you see so many different types of content creation that is happening. As I mentioned, our technology and equipment refreshes, but the other demand that we are seeing that was accelerated through COVID and to put it into perspective, the broadcast industry has been slow to adopt IP, but COVID accelerated that adoption of IP.

And when you have an IP world like the IT departments have had for the last 20-years, when you have an IP world that voice video and data can just be a bit in the stream. It allows you to do a lot of things like remote production, which we saw take off during COVID, which means you don’t have to be here to produce an event like this. So you can have people, announcers in one part of the world. You can have camera people in another part of the world, and you are able to produce a live event without having everybody on the event with a truck that is rolled out. So that is where we see a huge opportunity. That is where we are seeing pickup across our entire product line, is around what is called REMI. And that stands for remote production. So whether it is AI powered multi camera systems, 5G streaming, or REMI Technologies, those are all depend – there is a couple things about live production and live events.

They tend to be recession resistant, but also this micro tailwind that we have around REMI, around 5G, and around cloud allows us to continue to grow in whatever markets happen. One of our new announcements was our Terralink REMI, which is encoded delivers multi-camera, remote production capabilities, and then the Cliq, which I mentioned earlier. On the mil gov side, our revenues were 50% lower. And as I mentioned, this was primarily due to the military order that we had for Afghanistan in the third quarter of 2021. It was offset a little bit by first responder business, but our first responder business is not back to the levels of pre pandemic. We are seeing very good signs. The federal state and local agencies are in buying mode. I was just most recently at the Chief of Police Association conference in Dallas, Texas.

And I can tell you that the interest to use technology, again, a market where IP and IT technology still has a huge opportunity to grow. They want to use technology to help them do their jobs more efficiently. There has been pressure on headcount in a lot of the agencies and a lot of the departments. So the ability to use technology to help them do things more efficiently is certainly in demand. So we deliver tactical insights needed to ensure mission success. So we take air to ground videos and are able to get those in the hand of commanders or mayors to make decisions very quickly on the ground. Our AeroLink which we introduced in March has been a tremendous success, as I talked about earlier, and we see building on that, because now that we have the infrastructure in place, whether it is downlink transmitters, or receive stations.

And then the software on top of that is where the excitement comes in, that we can provide very unique advantages to our customers.

Michael Bond: So we continue to pursue a M&A strategy, a growth strategy both organically and inorganically. We are exploring opportunities that would be complementary to our business and accretive to our financial model. Some of the sectors that we are looking at are AI based automated video recognition, airborne video capture and transmission solutions, and C4ISR, which is command control communications computers intelligence and surveillance as it relates to the communications and communications network of the military. So we are looking at various opportunities in those sectors. We are also looking at sports analytics. And we are seeking market multiples as we are seeing market multiples decrease, and that is going to give us additional and ample opportunity to look for inorganic growth opportunities in the future.

So we think those opportunities present us with a tracked evaluations in the future that will help us to look for additional opportunities in the M&A space.

Mickey Miller: I get a lot of investors that ask about you what is our strategy? Where are we headed? And we have a technology strategy, in addition to things that we have talked about through our go-to-market in our engineering and our capabilities on the operations side. We have a technology strategy that drive software and services growth. The way we view, historically, we have been largely a hardware company, providing hardware to our customers. Now the opportunity is to take that hardware and make it more intelligent and we are doing that as our operating system, The LinkMatrix, which we acquired in the Mobile Viewpoint acquisition, which gives us the ability to remotely manage, control and more importantly automate a lot of the different workflows for our customers.

And when you look at what our customers do, whether it is military government, the workflows are very similar. You have content capture. So that means 4k cameras, 1080p HDR cameras, 60 frames per second, digital stitching and then you take that to the contribution. How do you get that to, where you need to edit it or where you need to view it. It is either through our COFDM, proprietary or through bonded cellular, which is the public networks or through private 5G, which we just introduced. Those are all compressed at H.265 which in the most recent compression technology that is used throughout the industry. And then there is applications on top of that, like camera control or intercom or video return. All those things are part of that, and then specifically for sports news and entertainment ability to produce it in the cloud to do post production to add graphic and things like that, and then ultimately to play out on whatever type of formats needed.

We have the trans coading capability to do that and then ultimately how to transport that around their networks. We have gear an ability to do that. But now it is all managed by our LinkMatrix Solution, which here before we didn’t have that capability. So now we have the opportunity to remotely manage and support our customers, and also to ride a revenue source there for us. And support them in the field in ways that we couldn’t before. And then on top of that, bringing our AI capabilities to allow them to make their workflows more efficient to be able to find the exact content they are looking for based on the need. So there is many ways that we can help our customer become more efficient for using machines to evaluate things as opposed to humans.

And then giving humans a much better, more concentrated view of what needs to get done and what the opportunities in the content that is available to do that.

Michael Bond: We think we are positioning ourselves for profitable growth in the future. Over the last couple of years we have executed on a turnaround strategy to position the company for consistent earnings growth. We have reduced our breakeven point from over 50 million a couple years-ago down to around the mid 30 million mark now and we to push that further. We have been re-invigorated our go-to-market capability to support our global Blue Chip customer bases in sports, news and entertainment. We have also pursued heavily the federal state and local markets for mil gov. And we have invested heavily in R&D. We have launched five new products in less than three years. Some of those products are the quantum receiver, the IP Link 3.0, the DVE 6,100 en-coder, the IP Link portable RF transmission System.

And lastly, and most importantly, we have just introduced the AeroLink. So we have streamlined our headcount in operating footprint and increased productivity over the last couple years. We have rationalized our product portfolio to focus on higher margin, higher revenue products. Mickey and I, when we first came here, we made a decision to exit about 70% of the products that we had at the time most were redundant, and that was a significant amount of overlap in our product portfolio. We have secured access to necessary capital over the last couple years. As you know, we did a transaction last October where we added significant amount of cash to our balance sheet. We now have approximately 25 million to 30 million on the balance sheet, and we are in very good shape financially.

We have closed on the acquisition of Mobile Viewpoint and successfully integrated with Vislink all aspects of the business. We have brought the bonded cellular and artificial intelligence technology that they brought to bear, and we put that inside our product portfolio and integrated into our product sets. We launched several jointly developed Vislink MVT products. We have launched the 5G four live, the Vislink Connect, the Baselink 5G, and the Cliq transmitter. We have also introduced an AI Clipping Tool. We have established LinkMatrix as the operating system for all our Vislink devices. And that is now the operating system that our customers can use to manage our total solutions. I will turn it back to Mickey.

Mickey Miller: Thanks Mike. You want to walk him through the preferred dividend?

Michael Bond: So, as everyone knows, effective on November 9th, our Board of Directors declared a dividend of one 1000th of a share of preferred stock for each share of the company’s common stock. That dividend will be issuable to all shareholders of record on November 21st of this year. That series A preferred stock will vote together with the outstanding shares of the company’s common stock as a single class concerning one issue. And that is the reverse stock split. A special meeting will be called with the shareholders to vote on that reverse split. We expect that meeting to be held on January 11, 2022, sorry, January 11, 2023. Each outstanding share of preferred stock will have one million votes. Therefore, each common share will receive 1000 votes. All shares of the preferred Series A Stock that are not present in person or by proxy at the opening of the polls of that special meeting will automatically be redeemed by the company.

Gabrielle Bajarano: Looks like we just lost Mike’s audio, unfortunately. But we can pick it up in the slide if you could, Mickey.

Mickey Miller: Sure. Alright. So as Mike went through we have a proxy – two proxies actually coming up. One will be for first the Board and the auditors. That will be the one December 27th. And then following that will be -.

Michael Bond: So as everyone knows Vislink received notice of the delisting on May 20, 2022 from the NASDAQ and that notice was due to the fact that we had a share price below $1 for 30 consecutive days. The company was given 180-days to cure that deficiency. We believe the prospects of raising the share price at above $1 is very challenging in the near-term. We think the best avenue would be to affect the reverse share split. De-listing normally causes, in a couple of reasons why we think that a reverse split is appropriate. We think de-listing would cause a further decrease in our share price. We think a reverse stock split does not entail dilution to our current shareholders. And clearing the possibility of de-listing we think would reduce some of the downward pressure on our stock price.

Many of the institutions that we know would not invest in a company that has a share price below $2. So in retrospect, we think that a reverse stock split is the right – the appropriate thing to do at this point.

Gabrielle Bajarano: It looks like we did get Mike back thankfully. You guys are truly the spirit of tag teaming here, to finish each other’s sentences.

A – Mickey Miller: So why we are optimistic the future of business. First, we have got a Blue Chip customer base in growing markets. As I said, independent if there is a macroeconomic headwind around a recession. The markets were intend to be recession resistant. But I think what is more important that in these markets, there is a digital transformation happening where they are using technology to help them to make their business more efficient. We think there is a tailwind of digital transformation that allows us to continue to grow independent, what is happening at the macro level. We have optimized our operating platform for profitable growth. As we talked about, we are very focused on profitable growth. We have made a lot of changes in this business over the years to be able to make ourselves more efficient, to reduce our cost, to reduce our breakeven and we continue to do that with our most recent announcement in third quarter that Mike talked about.

We are introducing new products at a record rate. Mike showed the five large products that we introduced. But with those, there is a lot of enhancements that go with those and also other products that we have done, and customers love the new products. It is evident by our sales are up 42% on the live production side and our AVDS sales funnel that is our Aerial Video Downlink Systems for military and government is the highest has ever been on record. So we are very excited about the work that our teams are doing of bringing new products to market to serve our customers and our customers are rewarding that. As I mentioned digital transformation across both markets that we serve is hot. And our product portfolio leverages all the newest technologies, whether it is artificial intelligence, whether it is 5G, whether it is cloud.

We take all those integrated into our solutions to bring that efficiency to our customers. As Mike talked about on the M&A side, we see inorganic growth opportunities at attractive valuations. We are very focused to make sure that, if we deploy capital from our cash base, it is very focused on something that is going to be accretive and is going to be complementary to our customers and serve our customers in a better way. This business has over 50-years of heritage, creating and deploying complex communication services and solutions. Our customers are here because of our team. The team at Vislink is passionate about what they do. They are passionate about the markets we serve, whether it be live production content or those in uniform. And we are very pleased and very considerate of the fact that we have this very noble mission, and we believe in our team.

The team has done a phenomenal job through very difficult situations, whether it was during the pandemic in 2020, coming out to the pandemic where everything needed to be delivered at once, through the challenges that we have had in the supply chain, and continue to work through every day, and focus on meeting the needs of our customers and helping them do their jobs more efficiently. So, as I said, we are optimistic on our future. We believe in this business. We believe in our people and the team we have in place. I talk to customers on a regular basis, and our customers want us to continue to succeed. They see a huge opportunity for the services that we are offering. They are giving us feedback to that and we want the opportunity to continue to do that.

So, I want to just close it at that and then Gabrielle will open up to questions.

A – Gabrielle Bajarano: Fantastic. Well, thank you Mickey and Mike. That brings us, as Mickey said, to our live Q&A portion of this broadcast. So just a reminder, if you have got any questions that you might have come up with as you were watching the presentation, go ahead and drop it in the chat. And it is being monitored by Vislink. So we will go ahead and review those questions and get them up here for answering. So this is your chance to get any and all of your burning questions answered by Vislink. And we have already got a few questions here ready to go. So we have got one here from (Ph). What are your plans for regaining compliance with marketplace requirements? Can you take us through that?

Mickey Miller: Yes. So ideally, we have until this extension and then potentially another extension, but we want to – we believe that a reverse split is the best approach now. There is over, I’m told over 400 companies, microcap companies that are under a dollar. A lot of companies are in our position. As you saw in Mike’s slide, we have over – we are trading well under our cash level. We think we are undervalued, but every CEO thinks they are undervalued. So that is not investment advice. But certainly being under a dollar is a challenge for us to get above a dollar to be NASDAQ compliant. We think the best thing at this point, at this juncture, what we see is a reverse split. Now, I know – at our last reverse split, I said this is the last reverse split that I wanted to do.

And believe me, we didn’t think we would be in this position when we did that. But this is an impact that is happening across the market with micro-caps. And then for us as a company, we have to view what is the best situation for us, because many of these companies will be de delisted. And I know there is a lot of frustrated investors on this call right now that heard us, say, we are hopeful that was our last reverse split. But I think things are different in the sense that the market is well down in the previous reverse splits before the one that we did. Markets weren’t necessarily down. And we have been investing prudently, we have been cost cutting where possible, as you can see from our breakeven that we brought the company through. And we have been doing things from introducing new products, increasing our ability to extend our reach to customers.

So we would like to continue with this mission as a public company, because a public company gives us access. We think there is upside there, and we ask our investor base to consider this. We can’t give you opinion on which way to go, but certainly we will go in the direction of our shareholders. This is your company. We are here at the pleasure of the Board, which is here at the pleasure of our shareholders. So we will execute as deemed appropriate by our shareholders.

Gabrielle Bajarano: Well Mickey or Mike, I will like you take either or of these, but as so from Byron Weaver, how do government orders look? Mike or Mickey.

Michael Bond: I can answer that. We are seeing a very robust sales funnel for government orders at this point, and we typically turned that as mil government, military government. We are seeing a great uptick in business, potential business with government first responders, particularly because we have just introduced our new AeroLink product, so that AeroLink product is being embraced very well by the customer base and we expect a very strong sales front with that and our other products in 2023.

Mickey Miller: Yes, I might add to that. This is not just a U.S. solution. It is a global solution. Military of defenses throughout the world are interested. We have had several coming to our offices to do evaluations of the product with our engineering teams as well as many have been looking at it independently. As I said, our funnel is the highest it has ever been in the last six, seven years. We are very excited about that. Obviously, as challenges, social injustice happens throughout the world, they need to have technology and systems in place to proactively deal with that. We see that happening throughout the world. So we think this solution is coming at the right time in the market and our customers based on the interest that they have in it are supporting that.

Gabrielle Bajarano: Well, you know we have got another question in the chat from (Ph). And she wants to know, who are the decision makers in the buying process ultimately? Your product offer is compelling, but I can imagine that some in the industry may be hesitant to change.

Mickey Miller: So we focus on the aviation departments within these organizations, because our bulk product is about air-to-ground communications and then taking that information and doing things proactively. And that could range from large groups at the agencies that are making decisions across the entire agency all the way down to a Sheriff’s Department where the Sheriff will award the business. So it is a wide variety we do it through both our and our channels that we have in the market.

Gabrielle Bajarano: This next question is from (Ph), and he wants to know, what will you do to increase see with the shareholders, especially in terms of contract announcements, while we see the post and releases about use at sporting events and conference to displays? He says it is really hard to quantify how these are reflected on the balance sheet until these earning reports and calls. How would you respond to that?

Mickey Miller: That is a great question. We get to ask that question a lot. We would like to share as much – we would like to share everything. Unfortunately, there is a big event that is happening in the world right now, which we are participating in. But we can’t say anything about it. As you can imagine many people in the live Tier-1 events want to be able sell their branding rights, sell their content rights. So they don’t like people riding on the tails of that. So we are limited in what we can say there. Secondly, for a lot of military, a lot of governments, particularly governments, they don’t like to make large announcements. If there are announcements around where there has been a vote among the city councils for example, Miami-Dade.

We received $1 million order from Miami-Dade for upgrade of all their aircraft as a part of their large program that they announced at the end of last quarter. That is a great example. But many times, it is limited on what the customers will announce and what they will allow us to announce. And at the same time, we push our sales teams to get that information but at the same time, we want our sales teams going out to find new orders. Not necessarily badgering our existing customers to have them to allow us to do a press release. So it is a balance, and we are trying to work that, but obviously in a lot of cases it is not to the level that a lot of some of our investors would like.

Gabrielle Bajarano: Well, I know in the earlier in the presentation you mentioned Afghanistan, so I just want to ask to further elaborate. What was your involvement there?

Mickey Miller: Mike, maybe, — is Mike still on?

Gabrielle Bajarano: Yes. Mike is still with us. Mike, you want to take this one?

Michael Bond: Yes. So we had a very good contract with the army, an area of the army called socom, which typically buys equipment for special forces. We had a contract where they were feeding in a particular type of receiver into special forces in Afghanistan. With the fall of Afghanistan, we concluded that contract with the army and with socom. And so we stand ready to do more of that type of business. But at this point, absent that type of fear of war, we are not going to see a lot of orders with that particular product at the moment. But again, we still try to find other ways to work with our military partners and customers to continue to increase sales. But with the end of hostilities in Afghanistan, that ended a very big piece of business that we did last year.

Gabrielle Bajarano: Well, Mike, as a follow up to this, maybe you could answer this question we just got about. How are you planning to make up for the military business shortfall that caused the quarters decline?

Michael Bond: Yes. As Mickey had mentioned, we have just introduced the AeroLink and we have kind of fashioned a new go-to-market team in that sector. And so we are seeing there was a lag, there was a defund to police effort last year, and that caused a lag to a certain extent in the orders, that we were experiencing in the government first responder side. And so now we are seeing that lag diminish, and we are seeing some real robust interest in our new products and our offerings. So we think we are watching the sales funnel will fill up. We think that we will see a real uptick in that government, military business mostly government in the next year.

Gabrielle Bajarano: Well, we have a next question here. Maybe Mickey, you can take this one. It seems like we have been hearing about the benefits of 5G for consumers just forever, right? So when will it start impacting the backend production side of business and where do your 5G products fit in this?

Mickey Miller: Yes. So I think it is going to be country dependent. In the UK for instance, they have allocated 400 megahertz of 5G, private 5G spectrum. And what that allows is for a broadcaster to set up a private 5G network, which they can uplink the videos and then bring those to the cloud or distribute them any way they want. In other parts of the world, particularly here in the U.S. private 5G is largely around what is called CBRS, which is only 150 megahertz, which isn’t public. It is privately owned. There are some licensed bands, but anybody can propagate on those bands and such that there is a potential for interference. So in that case, broadcasters are very concerned about using private 5G. What we do see happening for Tier-2 events is the public networks being used.

If you can imagine if you are a Verizon or AT&T, you’re focused on the downlink, what you care about the downlink is as consumers, we want to get a feed right down. We don’t have a lot going up. In our use case, it is more about the uplink, because we are taking video, compressing it and sending it up. So you need bandwidth going up. What we do for that in the public networks is our bonded 4G, 5G cellular capability, which allows you to bond two to three, to four to seven different bands together to be able to get that uplink. So we see that as an opportunity for growth, and then combined with our REMI products for a lot of people to produce events and completely have maybe one person at the event filming it, or that could be handled by an AI as well.

Gabrielle Bajarano: We got a question here about the new small Cliq transmitter you just launched. So Mike and Mickey are free to respond. But just what are the use cases for it and the sales that we are seeing?

Mickey Miller: So we are in the process. We have announced that. We are working with customers on final definition and final prototypes that will be introduced in volume at the end of first quarter, in the second quarter next year. The use cases are vast. Everything from drones, it is very small compact to shoulder cameras, the stability that is happening with POV cameras that is Point of View cameras. If you can imagine in the past, POV cameras were very shaky. It wasn’t very pleasant to watch them. That stabilization through the development of a lot of the sensors has improved dramatically. So with that and our transmission capabilities, it is allowing both body worn cameras as well – and again, these aren’t yet to where our goal is to get them in a helmet, but it allows them to have multiple feeds, whether it is from a helmet, say a motorcycle helmet and a shoulder camera as well as small applications, where they want to get a camera, very concealed camera for surveillance.

This allows them to do that. So with that size and format and power, it allows them to have a low power unit in a small package that used in whatever variety they want. I mean today we have solutions that are used in bases, on a Major League Baseball game and this continues to evolve that capability.

Gabrielle Bajarano: Well, you have mentioned that you are actively looking at M&A opportunities on the last few calls. So when do you think you will be able to announce one?

Mickey Miller: We are not going to make an acquisition just for acquisition sake. We are very active. We are in a lot of discussions. We see multiples coming down, that is the price to earnings multiple, whereas before they are well in the teens. We are seeing that come down a bit, given the recession concerns. And so, we are being prudent on how we want to allocate our capital and we are seeing how things of evolve. So I don’t want to put a time line, our goal was to be able to announce before the end of the year. But we are not going to sign up to terms and conditions or a price that we don’t think is in the best interest of our shareholders. So we are patient, but we are also very active.

Gabrielle Bajarano: Gotcha. Well you know are there any recent customer wins that you can publicly announce?

Mickey Miller: Well, Miami-Dade was big, certainly. We shipped that in the third quarter. We have and again, that was million dollar plus order and included some of the services things that we talked about today. You know it is funny the ones I love to talk about were under NDA with and they are not. I know it is some of the biggest deep event and we are not allowed to announce them. I mean there is one that is going on right now, which we have deployed a tremendous amount of gear that is going to do amazing things for the content that we are not able to share.

Gabrielle Bajarano: Okay. So not publicly announced, but there are some amazing things in the works. Okay, well, we have one last question here. Maybe Mike can take this one. Where do you expect to finish up in sales by year’s-end compared to last year?

Michael Bond: So we don’t give guidance ordinarily, but we do see a pickup in sales. Again, we are seeing a robust sales funnel filling and most of that is for 2023. But we do think that we are going to continue to increase in sales over the next quarter or so. And we have very, very strong hopes for the coming year, for first quarter, second quarter. And again, we are seeing very robust customer activity. But wed o think, we will kind of stay on the same path that we have been on through the remainder of this year, and then we will see an increase – uptick in sales and increase in customer activity entering into 2023 and beyond.

Gabrielle Bajarano: Fantastic. Alright. Well, we do have another question that just popped in the chat, and it is just about where are we with cameras with NFL helmets?

Mickey Miller: We still have an iteration or two to get there. That is our goal to ultimately get there. The challenges are this, you have to have an encoder and a modem that is low enough power, low enough in size and density to be able to provide at least a 1080p HDR signal. And so that is – this Cliq that we have introduced is closer to that type of product, but we need probably one to two more iterations to our ultimate goal. I said a while ago, our goal is to do that before Tom Brady retires. We will have to see if that happens upon this year. But we still – we have some work to do, and that is working with our semiconductor partners to be able to get the products that allow us to have a lower power very dense type of product that provides the solutions that our customers are driving for.

But that is our goal. And with everything that is happening around the software on top of it, as well as having bonded 4G, 5G, having private 5G and COFDM, we will have many different ways that that can be pushed to the cloud and content created.

Gabrielle Bajarano: Well, fantastic. That concludes our Q&A. So thank you to everyone who submitted questions so far. And just as we conclude this call, I want to ask Mickey and Mike, any last thoughts you want to leave with our audience who is watching right now?

Mickey Miller: Yes. I would like to say, look, we are as unhappy as anyone about where our stock price is today. We have been doing a lot of work behind the scenes, but it hasn’t translated into results for you and us as shareholders. We are very focused on that. We are here to build a big business that makes a difference. As we have said when we started, we are still very focused very committed to make that happen. The reverse stock split request, we understand it is not something we wanted to do. But at this point in time, we think it is the best thing for the company, given where the market is and where that timing on the market coming around may be. So I know a lot of people are not happy with it. I’m not happy with it. Mike is not happy with it.

And we are going to continue to work with our team who are working hard every day to support our customers and deliver them solutions that allows them to grow and generate new revenues and new content. So we get it. We are continue to work hard to make it happen for you, our investors. This is your company. We want to make you proud of your company and what you are doing, and we will continue in earnest to work hard at that. And we appreciate your support.

Gabrielle Bajarano: Well, thank you Mickey, and Mike any last thoughts?

Michael Bond: No, thanks. I do want to echo Mickey’s thoughts though that we are not satisfied or content with where we are today. Our mission, we came to the business a couple years ago, was to change it fundamentally to create a better value proposition for you, the shareholder, such that we could all benefit from that. Our mission is not done. Mickey and I will not stop. We won’t rest until we have created a business model that works, that increases the value of the company and hopefully increases the value of the shares. As Mickey said at this point, we are not happy coming back to the shareholders and asking for another reverse split. But know at this point, we don’t see a better alternative and we do want to keep public shares in the hands of our shareholders, and we think that is the best way to do that at this point. So obviously we are not happy, but we are going to continue to work very, very hard for you the shareholders.

Gabrielle Bajarano: Thank you, Mike. Well believe that are not that wraps of today’s conversation. So a big thank you to Mickey and Mike for joining us today to talk about the quarter’s updates and answer all of your Vislink questions. Hopefully you got some of your questions answered. We learned a lot. We appreciate your time.

Mickey Miller: Thanks Gabriel. Thank you.

Gabrielle Bajarano: Of course and as always, if you want to learn more, check up on current updates, events, please visit www.vislink.com. I have been your host Gabrielle. Thanks for tuning in.

Mickey Miller: And we will have a new website coming up in the next two weeks.

Gabrielle Bajarano: Fantastic. And a website update to booth. Thanks for watching.