Revenue during the quarter plunged 38.65 percent to $3.33 million from $5.42 million in the previous year period. Gross margin for the quarter contracted 637 basis points over the previous year period to 11.60 percent. Operating margin for the quarter stood at negative 11.34 percent as compared to a positive 0.25 percent for the previous year period.

Operating loss for the quarter was $0.38 million, compared with an operating income of $0.01 million in the previous year period.

Commenting on the results, Grant Bennett, president and chief executive officer, said, "In the quarter just ended revenues continued to be below our annual plan and below last year but are in line with our revised outlook. The revenue decline is the result of softness in the marketplace which we view as temporary. Over the past several weeks we have met with our major customers to better understand near-term demand, focusing on 2017. The bottom line is that weakness in demand for current products is likely to persist for a few more quarters; that being said, several new products are advancing through the pipeline, many with significant long-term growth potential." Mr. Bennett continued, "There are other positive signs as we look forward to 2017 and beyond. Most of sales representatives we signed up in 2015 have generated customers who placed orders this quarter a very good sign for the future since our typical sales cycle is 2 to 3 years; We continue to meet with large potential customers in China, which together with Japan, offers enormous potential for growth. This is especially true since today we have little or no volume in either country. We have seen increased activity in our armor business and expect to book revenues from 8 to 10 different customers by year-end, several of which could lead to production orders down the road. Finally, and perhaps our most important recent development, we will soon announce the hiring of a Senior Vice-President of Sales and Marketing. We cast a wide net to find the right individual to focus our sales and marketing strategy on those global opportunities where our unique technology offers the greatest long-term benefits."

Cash conversion cycle (CCC) has decreased to 79 days for the quarter from 84 days for the last year period. Days sales outstanding went up to 86 days for the quarter compared with 63 days for the same period last year.

Days inventory outstanding has decreased to 33 days for the quarter compared with 55 days for the previous year period. At the same time, days payable outstanding went up to 41 days for the quarter from 35 for the same period last year.