Narf Industries (LSE:NARF) — Investor Presentation

0:00 Good afternoon, and welcome to the NARF INDUSTRIES PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll, and then I'd like to hand you over to John Herring, executive chairman. Good afternoon, sir.

0:31 Hi, Lily. Thanks very much. Welcome, everybody. I'm John Herring, exec chair. With me today is, Steve Bassi, our founder and CEO. So we're looking forward to giving you this, current update. I think we saw a lot of you maybe early August in our last IMC presentation, so we're gonna kinda leverage off of that and hit on a number of items. There were some pre submitted questions I've taken a quick look at, I think, in the context of what we're here to present to you, that we'll be hitting all of those, and, and I'll be following in the, new ones that get in there. If we have time, we'll address them. But, in this format also, I think if we don't get to them, there's a follow-up for everybody joined about those questions.

1:19 So, yeah, thanks, and welcome to the presentation here. Let me give you an agenda overview to start with. So we'll start with the stakeholder content context. I think that's I give you a view of how, in my role of exec chair and our board, there's kind of seeing the trends within the company that we think are important to stakeholders, whether it be shareholders like yourself, but employees who are working here and our customers. So we kinda see where we're going. After I get through with that, I'll turn it over to, Steve, Ranger AI. He'll actually be giving us a demo today of, the system so you can see it live and what we're doing. He'll also frame a lot of the matters that you're interested in relative to what our calendar year '26 goals look like and the customer traction.

2:14 We'll do a wrap up at the end. I'll summarize, and then, we'll look over into the q and a questions and, give any, responses we can at that time. So without further

2:29 about that, let's hop into financial momentum. So I think this is one of the things that's, you know, certainly key to the board and certainly key to other shareholders. Right? We did put out our six month information into September 30, and there was some material, material improvement in our financial position since that time. Revenue was up 74%. We were up to 2,000,000 compared. The losses, we've continued to really drive those down. And our cash position increased without the c loan draw. Steve has a loan in the company that's 3,000,000. It varies up and down dependent upon where we're at at different times. So I think that's great thing that Steve provides to the company, and we're operating within those parameters.

3:24 Post the six months that we announced, we did announce another 3,600,000 contract award for government research and development. It's a division within a company. You'll hear me talking about that. So that's an operating group. For g r and d, the awards this calendar year have now top 10,000,000. That's been a real blessing for us and great credibility to Michael Acosta who leads that group. And it has been the key driver in this past period that we reported on, and it will be in the near term going forward. So we're very fortunate to not only have the technology and the IP coming from that, but also the operational cash flow that supports the company.

4:12 A number of you had asked about the government shutdown. It did create some temporary friction for us. No long term. We didn't see any contract awards being delayed. We have seen some, timing of late receivables, late processing of things like that. So, we've been able to deal with that within a CEO loan draw drawing down, paying it back, as, the cash flow to come back and forth. We do have another event in the end of January twenty sixth. The budget does come up again. So, we're monitoring that and following it, very closely. So, we're hopeful that, the lessons learned this last time, the issue that was made relative to health care gets resolved before then and that, people are a little bit more rational as we move towards that period, but hope is not a strategy. So, we're taking a hard look in planning all along.

5:13 Next, I wanna remind everybody of the business model traction and put it into a perspective. You've seen us talk a bit. We we've got a g r and d group, our GS and S group, which is mission focused. And at some point, we'll get to enterprise expansion, but we're really operating in the one and two area right now. Underlying it is that we use this nondilutive r and d capital to drive, to create these missions today. So we retain the IP. We own the IP. We can use it. And so we're kinda moving through this chain, and I just want to remind everybody of it. And so at a board level, we're very interested in how the company is executing on a business model, and we're seeing progress there. So, like, we saw progress on financial.

6:03 We are seeing this progress in the business model. You know, overall, we're leaning into the cyber market direction, you know, us and about everybody else in the world. Right? So these are continuing positive trends for us, but, really, what I wanted to hit upon is maybe give you some insight into the strategy and execution of the business model that I think really differentiates NARF and NARF and differentiates this executive great executive team that we have. So within that, let's peel back on g r and d for a minute. Yeah. We talked about the focused and non dilutive r and d, which is really key. But something very important that the team has been locking down on is that it's just not chasing r and d because we'd like to do basic research.

6:57 It really is targeted, to the areas that,

7:03 we are building strength in, and we only wanna get contracts in those areas to do that. So we're seeing that. We're getting this really compounding capabilities being built on top of each other. The next thing is that, as we focus on which ones we're pursuing, we wanna make sure there's a direct line from research into these mission operations from GRD into GSS. And so we're really focused and do really well in accelerating what we're doing to move into that. And I would tell you that

7:44 it's a big theme of the government. The government, even in their r and d funding, is looking for this. So to have Steve who comes from an operational background, very mission focused, teamed up with Michael Acosta, who's our head of g r and d, you know, great PhD, great sense of mission also. But to have those two in the room with, these senior government executives and kind of see the, capabilities, the experience they have, we we we garner a lot of confidence from our customers. They they wanna deal with us. The next item is this compounding capability across projects. So once you do get it focused, right, you can build more technical depth and mission understanding. And so we're getting this cumulative expertise across it, and you're seeing it positioning us if we're into larger, high valued programs. So that 10,000,000 this year that I talked about from GR and D, you know, $66,800,000, award, back in January, February, which was one of our largest, and now we've got this coming.

8:52 So, the board is seeing visible traction in awards and scale coming out of GRD. And I would tell you that there is a very good, path of proposals that we're looking at and working on, and so you can continue to see GR and D, you know, delivering this two to three type of big wins during the year.

9:13 We get some smaller wins in the 400 k that we don't bother you all about announcing, but they kinda add on to it. So, we're we're very pleased with, GR and D. So, again, business model traction, what GR and D is supposed to do, we're seeing it move along very well. Let me turn to GS and S. So you all remember the transition we did year and a half ago with GS and S following more higher margin activities, this transition of Ranger taking our limited resources and going all in on this. And I could not be more pleased with the with that strategic decision that the the executives made and the board supported.

10:03 It's really beginning to show that traction and results. So Ranger AI is that flat flagship transition. It was developed with 4,000,000 government r and d funds and contracts, and now we are mission ready and positioned for deployment. You'll hear more about the this from Steve, in just a minute. Important to the board, it's an entry point to broader DOD demand that is out there. Again, Steve will try and talk about that and that we see traction with calendar year 26 opportunities building. And I'll, again, leave all that to Steve. But very key that and and now we're working with GRD, more to figure out what that next thing that will be coming out of them that can transition into these GEO programs like we're saying Ranger while we're maniacally focused on making Ranger a success and and getting it out there.

11:05 Finally, let me introduce this agent to AI platform. It's an emerging foundation of the company.

11:15 The mandate and strategic rationale, the platform where it is in forward direction and branding. Hey, Steve. You were the leader, of this. You've made this change in the company. You saw it early on. Can can you address those first two bullets, the mandate and the the platform?

11:39 Sure. So as, you know, LLMs and generative AI were becoming bigger and bigger, there there became this trend around agents, people building agents to codify, like, most software stuff they do every day that they didn't wanna do anymore. So we, we really put priorities around, having our security expertise, that we're engaged in r and d and other other activities, usually for high end government customers, DARPA, the intelligence etcetera. We challenge them to start codifying their knowledge into this platform because we think this is the way work is going to get done in the future. And we're seeing this come to fruition today. Lots and lots of, announcements have been made by everybody from Amazon to Microsoft on moving to these agentic platforms, enabling a reduction in headcount and, broadening the scope in which human expertise can be applied by these agents.

12:37 So we've been really pleased with the, movement into this theme and and building this platform around which our software security experts, you know, can can rehost their knowledge and make it available twenty four seven. And then, again, adding on to that is this fact that Steve has focused the organization in everything they're doing. GR and D. He is there and actively building into these proposals this agentic platform that we're developing, making sure their dollars here to continue to develop this and to to deliver those activities.

13:30 The Ranger AI has certainly been heavily influenced by this agentic AI platform During the DARPA days in early development, it was it was there, but it was not highlighted as much as it is now with Steve's direction and where it's going, and it's become very foundational. You'll see Steve here talking about all these, accelerating threats, talent shortages, which this platform makes up for. And then, Vibe coded software proliferation, and I think if you all know that term, that's basically saying, hey. AI is allowing people to generate code much faster than ever before, so you're kind of dealing with the tidal wave.

14:22 On the value and strategic leverage, I think that's, very key. We're seeing it as a reusable platform that it's extensible across most everything that we'll be dealing with as far as missions that are out there. And so that's a great trend that we at the board have seen being implemented by Steve and the team, and it's required a lot of, Steve's time in order to go drive that. He has been the, main, champion of that, and it's caught fire in the organization. So I'll give you a little bit heads up about four direction and branding. So, really, what you're gonna see, and I think it'll come through with what Steve is doing, Ranger AI is a a very specific targeted use case off this overall agentic AI platform.

15:19 So Steve will talk about where that's focused to containers and and what it does and what it delivers for that particular use case. There are many other use cases that g r and d is dealing with in these very advanced stages. All of those use cases will be able to be put onto this platform. So I want you to think of Ranger AI as a vertical application sitting on top of this horizontal platform. And, as we move forward over the next couple months, we'll be working internally to, kind of, brand, this platform a little bit. You might see a change to the raid your name as we, modify it over into this vertical application space, but that gives you an idea of how significant this is and what we're doing to to move this along.

16:16 So just to recap, what I went through was the find out the financial update where we're seeing improvement in activities, the implementation of the business model that we see strengthening, and then this overall platform that's beginning to develop underneath everything we we see. So those at the board level are kind of those major major value drivers that we're looking at, and we want to ensure that we're communicating that to all stakeholders and certainly that we do continue to position that more prominently with shareholders as it's coming along, and we're getting the traction that backs it up.

17:07 Steve, with that, let me go ahead and turn it over to you. I'll while you're giving your pitch, I'll review some of the questions here to make sure that we're having answered them and getting them lined up and, yeah, go from there. So take it over, Steve. Thanks. Sure. Thanks, John. That was great context. I'm going to talk a bit about the, product and technology side and, initial prospects, for Ranger AI, why we expect to, be discussing more contracts in q one of twenty six.

17:43 I'll try and move out of the slides relatively quickly and step you guys through some of the, the platform that's been built and is being delivered to, prospects and customers right now. And then we'll talk about, you know, how that how that goes forward in the future as well, Additional capabilities we plan to inject into the platform that are really wowing early prospects and driving them to to to close deals in in next year. So first, as a reminder, we had previously talked about this idea of open source software as a risk and why it's a global priority. The amount that's been invested in developing open source software that a lot of enterprises, almost every enterprise in the world, builds their platforms and solutions on.

18:32 It's about $8,000,000,000,000 US. There was a great Harvard study that came out a while back that that pegged the, the amount of investment into that infrastructure about 8,000,000,000,000. And because of this, basically, if you're a start up or a, you know, a more advanced company, OSS actually forms the foundation of everything from your database servers and your applications all the way to how you, you know, encrypt your web traffic and serve it out to your customers. So it's it's really there every step of the way in your supply chain. Unfortunately, this means as open source is contributed to by a ton of developers to around the world with varying degrees of of code quality and the new addition of AI assisted five coding.

19:19 This means that your attack surface is vast and keeps expanding, And we see this, actually. There was actually a recent, security issue announced with, something, in React and, Next and Node. Js, that affected a gigantic portion of the deployed web applications out there and had to be patched rather rapidly, and this was in the last month. So these these major security issues and widely deployed open source software are occurring at a at a regular and accelerating pace. And the complexity of this ecosystem amplifies these things. Oftentimes, when people build solutions, they're not just building on one top of one open source project, but they're building on top of the open source project's dependencies on other open source projects.

20:09 So it's it's kind of this vast web of software that all presents risk to the enterprise. And we'll talk a bit about how Ranger sort of handles that and applies, AI agents to to really handling the huge volume and workload that would otherwise fall on an enterprise cybersecurity team. So the real blind spot for these, for these enterprise security teams when their when their software developers are adopting open source code and building their critical systems on top of it is this idea of a developer there. And it really remains the most under addressed risk in open source software. Open source is built by millions of developers around the world. Some of them work for companies and have various corporate agendas. Some of them are completely independent, and maybe there are one or two people that maintains a critical library or dependency that everybody from Amazon to Google happens to to rely on some piece of their infrastructure.

21:08 So because of this, we actually see adversaries, both state sponsored and financially motivated, really targeting these powerful code maintainers because the code they write ends up on devices that serve millions, if not billions of people and ends up in servers and data centers that do the same. And so thou you know, exposure or compromise of one of these key open source developers, and we saw this April '24, when somebody targeted a a library that was used in the administration of most Linux servers worldwide, and they were almost successful. We see these developers really being targeted now in these projects. But traditional tools, traditional software actually miss, most of these attempts, And humans driving these traditional tools instead of AI agents, just really can't keep up with the volume and the pace at which open source software and all the things you depend on evolves.

22:05 And this is exactly where we've designed ray Ranger AI to operate.

22:12 So Ranger has several pillars. One, it's designed to be a set and a platform of expert AI security agents. They're consistently reading and vetting all the source code that's contributed to the open source ecosystem. And more importantly, whether it ends up in what we call software containers, which are sort of the primary unit of consumption for enterprises and other places out there that leverage things like open source web servers, open source database servers, and their key infrastructure. And Ranger looks at a few aspects besides source We really wanna understand what the developer specifically, the key developers on these open source projects do and how they do it over time, mainly so we can assess their capability and strength,

23:08 but also so we can look for compromise of these developers. And if for one for example, in one week, they're contributing, you know, advanced computer physics algorithms to a key open source project, the next week, they start modifying authentication code in some key library that everybody uses, obviously, that's a red flag. So this also the sort of what business is usual for specific developers, specific key developers looks like, enables our AI to spot, when developers sort of divert from that path or sort of depart from their lane and are about to crash, everybody in the car involved. And this another key opportunity that we're seeing arise from here is it really highlights areas in our allied and national supply chains, where we are leveraging source code from primary adversaries, and where government ought to and should sponsor onshoring efforts of key open source components, that that turn them more into European, you know, English and, American developers, maintaining that code rather than, people who can be influenced in in adversarial countries.

24:23 And last, we have a huge emphasis in Ranger on actually, fixing the issues that the AIs are able to spot. This is forthcoming from us. We have some great early results with some of our early prospects, where we're actually fixing open source code that they rely on and, eliminating security bugs before they're ever, reported in the media or before they're ever realized in the broader community. And this all leads to basically a huge opportunity for headcount reduction. You've already seen it in public announcements from the likes of Amazon and other large enterprises out there where they plan to move a significant amount of their processes, you know, from expensive, IT and cybersecurity professionals to more agentic AI processes.

25:11 We are following this trend and providing the the agentic software that exactly does these sorts of things, for the software security supply chain. So with that, I'll ask to be switched over to the, the demo, and I'll tell you a bit about what you're looking at. So we have developed the Ranger platform and, you know, and used it in our, in our negotiations with prospects, and customers for next year, to do a few things, in the beginning. And these are a few things based on customer demand, that that really stuck out to us. So what you're seeing in front of you is a dashboard or a bird's eye view of what all our AI agents have been up to, for the last few days and making sure some of these customers' key open source dependencies are secured.

26:05 So there's three three pillars here that I'll discuss. One, in the upper left hand corner, you'll see basically a a bird's eye view of all the critical issues that, our AI agents have discovered in customer, open source software and dependencies, recently. And the reason these are important is every day, there's thousands upon thousands of source code contributions across a wide variety of open source software projects on GitHub and other places. Every one of those contributions has the ability to be a major security issue for that that project. So what you're seeing here is us in real time reading these contributions and flagging the ones that are risky from a security point of view. So we have a couple high and mediums, that are that are on the recent stack and applicable to the to the demo customer here.

27:01 You see a little bit of a bird's eye view on the right hand side on the actual activity, that our agents have been taking to secure the the customer's open source dependencies over the past few days. Now something I wanna point out here that's key is we actually have several agents looking at different aspects of source code security, and these were coded by our internal experts to go look at specific aspects of where we find we often find security issues. Now the great thing about putting this into an AI agent driven by LLMs on the back end is that these are flexible. They can look at different code bases. They can look at different programming languages even and still spot security issues across a wide swath of programming languages and a wide swath of developer styles.

27:54 And that's what really makes them powerful in this approach. And I'd like to point out that each one of these agents, right here is probably doing at least three to four hours of human work, in a matter of seconds and posting their results back. Without these, it's really, really impossible, even as a small enterprise, to keep track of the open source software you consume and the security ramifications of the code that's that's making its way into that software. So that's sort of what the the agents do on the software source security. But we also talked about how, developers are very important in monitoring the sort of, patterns that, the developers exhibit, where they're from, and where the software that makes up our our supply chain, comes from. As you can imagine, this is especially important in in government and defense circles.

28:51 You know, your fancy weapon system turns out won't work if it's based on open source software that's that's developed overseas and is is, you know, there's a backdoor or some issue in it at time of, time of use. So one of the thing our agents actually track out there is we look at key developers on open source projects. We figure out where they're from and what their sort of day to day code contributions look like. So we can tell, specifically, our defense customers, if those, patterns diverge or if that user starts suddenly contributing code that looks of lower quality, of different authorship, or has the the same security issues that our AI agents are are trained to spot.

29:37 So in this view, you see a couple of, potentially risky, developers, and you see sort of the distribution across the planet of developers on key projects that this particular, demo slash customer cares about. And that's illustrated a bit more down below. We sort of pull all of this together into a single open source project, risk score surrounding, both the developers that contributed to it and the security issues found in that. And to really understand the complexity behind this, it's it's instructive to go ahead and pull up a very scary looking graphic. So I wanna point out that this is the result of our AIs analyzing just three software containers that that a specific set of customers might consume.

30:33 A few things on this graph. One, we've mapped out the country of origin of all major developers on these pieces of software and their their dependencies. Now the real key thing in here is all of these small gray dots are basically dependencies that are relied on by just these three software packages. So, obviously, you can see there are hundreds in this graph. So as you can imagine, it might be it's probably impossible for anybody even the size of Amazon or Google to read these source code contributions and understand whether or not there are emerging security issues in them. Ranger AI's agents in our agentic platform do this for our customers and make sure that every line of source code is analyzed for security issues and, more importantly, patch if there are security issues.

31:30 So a word on patching. Let's see if this I pulled up a an agentically generated security report on one of these issues, and I really wanna specifically point out that the AI is actually able to propose patching and and fixing of these security issues as they occur. Now this is super important because as these issues are found, there's a there's a huge delay in which the the in traditional worlds in which the issue is found, reported, validated, and disseminated to all the people that are vulnerable to the issue and the window that the attacker can take advantage of it.

32:21 By using AI, by using agents here, we're able to really shorten that window be behind when we find a security issue and when we patch it and fix it for our customers in AI to a matter of minutes, which is super important when you're dealing with attackers that can find security vulnerabilities using AI assistance as well. So a couple last things I'll I'll sort of mention here. Here's a zoomed in view of just one critical project to many of our customers. It's it's called Grafana. It allows them to to basically monitor their enterprise deployments and understand, you know, day to day IT operations.

33:09 It collects a lot of logs and key statistics, so it has very sensitive information inside of it. And the reason this is interesting to, especially, to our defense customers is it's largely maintained by a current and primary adversary, you know, that that, that we worry about in most of our defense communications. This is true across many of these dependencies. And when we go into, especially, defense customers and show them some of these graphics, we are immediately fast tracked to their security teams and getting this data and our AI agents actually watching what they're consuming, in open source land. So with that, I will, I will pass it back over here, and we will continue on the slide deck.

34:02 Okay. So we had a quick tour of the platform, and we I wanna talk a bit about execution and, calendar year '26. So we have been, you know, funding the the building of of Ranger, mostly with our GR and D wins. But we are, despite the government shutdown delays, we're pretty confident in q one. We'll have some contracts to announce there in '26, specifically with the defense and defense partner channels. This has all been based around how we analyze and look at developers and the software they contribute and tying that back to, the software that these defense, partners, integrators, and the actual armed services are consuming in their in their everything from their weapon systems to their payroll administration.

35:00 So the other key thing on this has been we, can spot opportunities for where the government can make smart investments in onshoring key aspects of the open source supply chain, to make sure that the primary development is done in the in The US, EU, and and UK and allies, to make sure that, those chances for influence really reduced. So I'll talk specifically about Iron Bank. Iron Bank is the, the software container, registry for the US Air Force and used across the wider DOD market. We have received awardable status on the platform one marketplace, which means the DOD driven procurement is sped up for Ranger AI specifically.

35:50 And we're looking this to fuel three to five additional customer contracts through that channel by the end of calendar year '26. In addition to that, we think the pipeline and the funnel top of funnel is going to greatly expand across '26, and there are three pillars to that. One is system integrators, that are already working for large enterprises, producing systems and maintaining systems that use key open source projects and really need to have a cybersecurity and compliance story across those projects. The second is into vendor platforms. Ranger AI and its agents produce a ton of key data that help other threat intelligence platforms, and other, other cybersecurity programs out there understand where key vulnerability risk lies in already deployed systems.

36:45 And so, we we have quite a bit of pipeline and experience in that side of the pipeline, to add to top of funnel with Ranger AI. And the last is we've really seen an interest, driven by concern that many of the key open source projects that everybody from platform one to, to other DOD and large system integrators, use is is built abroad. A key example here, something called VMware and related technologies. VMware was acquired by Broadcom a while back, and you can actually see in both Ranger AI's data and our security findings that key software development move from The US and Europe, onto Mainland China, specifically in Beijing and Shanghai over time on these key projects.

37:40 As you can imagine, when we show this to key prospects and customers, this really pikes their interest, because a lot of their infrastructure is based on, a lot of their critical infrastructure is based on these open source projects that are now maintained by developers in adversarial countries. So we'll talk a bit about what a typical engagement looks like, for us. So we combine two things, with Ranger. As you can imagine, we've got a lot of software security expertise with NARF, and, you know, we built Ranger to encapsulate a lot of that expertise. So we sell, our engagements in in two phases. One, we provide integration in a SaaS platform that really looks at the customer's key open source infrastructure, and provides, back ended services, to basically deal with the findings of Ranger's AI components. So as you can imagine, Ranger AI can find and fix a problem in a key open source component that a customer uses, but sometimes they need a little help understanding the impact and deploying that within their environment to make sure that that they're actually safe from attack based on that discovery.

39:00 So that turns us into a phased deployment plan where many customers begin with the integration of Ranger AI's data and the concept of operations, and then allow us to actually push fixes to their live, software registries where their production infrastructure, pulls from, which sort of automates the whole path. But all these services work on top of the SaaS platform delivery really is there to support a smooth transition into these automated headcount saving features. And so that basically leads to a three part revenue model where we have this one time integration fee. We have the annual SaaS subscription, and then we have mission services that crop up based on based on everything from ensuring key dependencies to help fix to helping having human expertise fix key issues that ring Ranger AI discovers in our customer's infrastructure.

39:55 So with that, we'll hold in a wrap up and answering some questions, and I'll pass it over to you, John, if you've had the chance to take a look at at questions while I've been talking. I have taken a look through them, Steve. And while I'm kinda doing the wrap up, you can do the same, and we can weigh in on them together. I'm happy that, probably about 80 of them we've, answered and the other 20% just more clarification of some of the things that we've said. Let's see what's left in this slide deck here. Yeah. I I guess the other thing at the board level that, we're concerned with and look at, right, is just how all stakeholders are doing and, kinda where we sit. You know, we have significant ownership of this company, but still the founders, of the company.

40:44 You can see Steve, Nick, Ben, myself in there, and everybody else who's kind of in. The larger ones are people who followed us from the beginning. So I really appreciate the stakeholder support here as they were kind continuing to build value and trying to communicate it in some of these tough markets, today. So, but just, again, just to make sure you understand that the executive team, is right there with you in regards to, wanting to increase the share value. Steve asked me every day when he can get his $3,000,000 loan paid back, but then he goes off and hires new people.

41:32 So, you know, he is really dedicated to investing continuing to invest in this company and using all the cash flow to drive it forward. So, yep, just some key stats there to to mention. Let's kinda deal with through the end of the year and wrap up with this. You know, GRD is carrying the revenue and cash flow generation. So, you know, we have gotten these contracts. We have to staff them. We need to burn revenue on them and negotiate good revenue milestones so that we can get things done and get the revenue in. So it's a it's a day to day grind on that.

42:21 We have some existing programs we're looking to drive more revenue out of and earlier cash flows, so that's a day to day, again, tactical things we wake up to do. We're balancing the receivables and timing with available CE loan headroom, and we've managed to do that within that headroom that we have at 3,000,000. We have ticked up a little bit since her September numbers, and that was because of the government delay we had in beginning of October. We're beginning to recover from that. We still finished the January 26, government budget delay. So that's something that I've been asking the team to prepare for, and, we have plans being put into place.

43:10 But we are hopeful that we won't see see see that. So, very key. Ranger execution, we are onboarding a recent hire. So we are hiring in these areas. He's a very senior individual. He's, taken over the product and project executive role. We brought him on about a month and a half ago. Steve could have said, well, gee, I want my loan paid back. I'm not gonna hire any more guys. But Steve's not that way. He also has another hire coming in. So, continuing to operate within our financial model and what we have and very, focused on, you know, driving these products and all. Steve talked about closing the first two accounts. We at the board are following that.

44:03 He's got very good insights. We know the customers. We know they have dollars. It's advanced so that we we feel very good about that. We're organizing targeted business development engagements, and that's gonna be very important to get these next, three to five customers in. It's not an overwhelming task to go do. We've, narrowed it and focused it, but it certainly is something that, we've got to, I'm watching very closely as how the team, organizes to, go after that. And, that branding advancing the agent AI platform is, certainly, high on the schedule. So if there's anything else at the board level you want me focused on, I saw some of the questions.

44:52 We'll address those in a minute. I'll try to give you the perspective there. But those are the key things I think that that we're we're kind of buckled down on as we get to the to to the end of the the our fiscal year. Steve, is there anything else that, in investor case, yeah, where we we wanna continue to make this case, and we're gonna try. One one thing I'm, pleased about and which will probably help is that, now that we're moving into this product and you saw Steve's compelling demo of this. Right? Being able to capture that information, not only for purposes of customers, which is what the BD team is, off doing.

45:46 We can take a lot of that and repurpose it for investor purposes and begin to get it out there. So it's not just, you know, waking up and generating some information for investors to to try to keep things going. It's like we can really leverage, things that we're already doing and repurpose it. So and we're gonna try to communicate this investment case out there and to, keep it moving along. Alright. So that was kinda wrap up, the q and a. So, Steve, I kinda looked at the, let me get out of this full slide mode and get back. Yeah. I I can take a couple of the q and a questions. I've been Yeah. Go ahead. Go go go. Yeah. Let let let me take a few that I saw, you know, kinda popping up right away, and then I'll let you hop into.

46:36 So so I think from the r and d side, I think from the overall side, I see a lot about not a lot, but a couple of questions in there. So, you know, what's unique about us and how are we driving in and how are we playing in this larger space of people out there pursuing the market. And what what I would say is out of r and d, what we're really doing is the government is identifying issues that nobody's addressing today, and they're trying to find people in the r and d world who can begin to put together some initial concepts. So we're not entering these markets with a me too product. We're entering these markets with a, hey. This is a hard problem nobody took on.

47:23 We took it on. We're first out of the gate with the innovation on it, and we're looking to move it forward. Saw some questions in there about the relationship with prime contractors and what we see. I've lived this world for longer than I I I I wanna talk about, but as a innovative young company, you are elbowing prime contractors. So the only way you can really do that is you've gotta go build demand in the government first, and the government has to be asking the primes for it before the primes will react. So it's a well known strategy and approach, and I I think we've got the smarts to go do that. And you see, you know, certainly with the iron bank capability that we've got well in line for that.

48:21 The other thing, I saw a question in there about the wow. You seem to be doing a lot for a company without a lot of people. Yeah. You're right. I mean, that's a real challenge. We've got so much innovation and creativity in this company that we're we're we're having to, keep the lid on. But what we have done is to ensure that anything that we're doing is aligned and focused. So that's a GRD focus that you see that, you know, only going after things that can, cascade on top of each other. And then the next thing is to make sure they only come through into g and s and s where we, you know, really have a defined mission and after it. So, yeah, we've gotta be really focused on, disciplining ourselves there, and I think the team is and that's what I hope to reflect in some of these trends that the board is saying that the team really is responding and sensitive to that, and they're and they're grown ups about it.

49:20 I see questions on profitability, cash flow, things like, things like that. So we are focused on building I think the best value is built by getting these products into market and showing them that we have customers for them. So if we were focused on profitability as a key metric as a small company, I I don't think that's right. I think what you wanna do is see a company that manages within its financial parameters, doesn't dilute shareholders, but gets things done that build value. And I think that's what we're kind of on track for. Again, like I said, if we were want to get to profitability, then I'd tell Steve, no. Don't hire new people to to to go bring on that burn up our cash flow and activities to get to that. So, yeah, profitability, I I don't think that's the right direction as a board to set for the company.

50:23 Living within its means, not going to market when it's not a favorable time, share prices are low, and navigating that is what the board is focused on. And the executive team came through a hell of a year last year to get us where we are. Steve, did you see some others in there? I saw some things about value of contracts and amounts, things like that. Yeah. I I saw a couple that I'll try to put together, you know, questions on, you know, hey. We're small and relatively unfunded. You know, how are we playing in a market covered by deeper pockets is the essence of it. And the second one, you know, was around how, you know, open source is developed in the open. Isn't there peer verification?

51:10 Why isn't that working? So I'll cover both of those. One, you know, we while we are focused on reviewing and finding flaws and fixing them in open source code with our AI agents and and growing that practice, The reason for that is because, you know, it's got about $8,000,000,000,000 of investment into it. And because of it, a lot of people rely on it. Peer review and open source code basically doesn't happen at the scale required to find the security issues and every developer is not also security expertise, which pull up folds into how we play in this market. It's true that the Anthropix and the AI or OpenAI is out there, you know, are producing a lot of great, products and a lot of great usage for their models.

52:00 But they all those applications really rely on human expertise and human creativity, to inform agents and manage them on their sort of day to day tasks. And our our expertise happens to be software security, and it's somewhere that neither OpenAI or Anthropic or any of the other big boys are directly focused in, and where we we play quite well and have a long track record. So that's how I would answer that. Let's see. In terms of importance of each of the elements we discussed in a typical range or engagement, typically, the the SaaS the repeatable SaaS funding is about 70% of that revenue model.

52:45 And we were asked another question about when SaaS will become meaningful total revenue. I suspect you'll see that, if not within q one next year, within half one of next year, when we think that revenue will be meaningful. And I think those are that pretty much covers the flavor that I wanted to answer. How are doing on that? And and I I think I see something on strategic distribution partners, things like that. Again, In the near term, we will we've got great access because of Iron Bank and that wealth of relationship to get directly in front of the the key government executives to kind of advance our story and to get that done. And with the three to five opportunities in addition to the two kinda house accounts that we have that Steve talked about with Iron Bank and and another integrator that we that that is something that it can be done by this company with its size.

53:50 And, again, I think once we like I said, once we establish ourselves there, the government will be telling these prime contractors, oh, we want this capability, and that will drive the primes. And so calendar year '26 to me is, again, getting validated customers with mission requirements, continuing to round out these capabilities, that we've got, and positioning to really scale in calendar year '27 where, like I said, I would expect to see a 10 x increase in the number of, customers we're gonna be getting and, much more following into the, the the the SaaS model, that we've, been looking at. Steve, I think that covers it all that I've seen. And if we haven't covered any of it, we will, in this format, make sure that we write up the answers. And I think IMC ensures they get out to people and certainly our PR firm will do that.

54:57 Alright. So from the board standpoint, we'd really like to thank all the stakeholders who are working hard. The employ the the employees are are are do are doing great. I couldn't be happier to have an executive team with with Steve around. We're bringing up some new people. You saw some on the phone call last time. Next time, you'll probably see a couple more of our new faces on here who are driving it forward. So alright. IMC staff, I think that's we're ready to wrap this up. John, Steve, thank you for update updating investors today. Can I please ask investors not to close the session? It should now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations.

55:43 This may only take a few moments to complete, and I'm sure be greatly valued by the company. On behalf of the management team of NARF INDUSTRIES PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.