Good morning, and welcome to Coda Octopus Group Third Quarter Fiscal Year 2023 Earnings Conference Call. My name is Sherry, and I will be your operator today. Before this call, Coda Octopus issued its financial results for the fiscal third quarter ended July 31, 2023, including a press release, a copy of which will be furnished in the report filed with the SEC and will be available in the investor relations section of the company's website. Joining us on today's call from Coda Octopus are its Chair and CEO, Annmarie Gayle, and its Acting CFO, Gayle Jardine. Following remarks, we will open the call for questions. Before we begin, Jackie Keshner from Gateway Group will make a brief introductory statement. Ms. Keshner, please proceed.

Thank you. Good morning, everyone, and welcome to Coda Octopus' third quarter fiscal year 2023 earnings conference call. Before management begins their formal remarks, we would like to remind everyone that some statements we're making today may be considered forward-looking statements under securities law, and involve a number of risks and uncertainties. As a result, we caution you that there are a number of factors, many of which are beyond our control, which could cause actual results and events to differ materially from those described in the forward-looking statements. For more detailed risks, uncertainties and assumptions relating to our forward-looking statements, please see the disclosures in our earnings release and public filings made with the Securities and Exchange Commission. We disclaim any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law. We refer you to our filings with the Securities and Exchange Commission for detailed disclosures and descriptions of our business, as well as uncertainties and other variable circumstances, including, but not limited to, risks and uncertainties identified in our Form 10-K and Forms 10-Q for the first, second and third quarters this fiscal year. You may get Coda Octopus' Securities and Exchange Commission filings free by visiting the SEC website at www.sec.gov. I would also like to remind everyone that this call is being recorded and will be made available for replay via a link in the Investor Relations section of Coda Octopus' website. Now, I will turn the call over to the company's Chair and CEO, Annmarie Gayle.

Thanks, Jackie, and good morning, everyone. Thank you for joining us for our third quarter 2023 earnings call. As a management team, we have established over many years a good track record of running a profitable and sound business. In addition to remaining profitable in the third quarter, we have been profitable for 45 of the last 50 quarters and every year for the last 12 years. We have also spent the last four years on the development of our new generation of underwater products and solutions, including our Echoscope PIPE and our Diver Augmented Vision Display system, DAVD, which underpins our growth strategy. We believe that the company has almost unrivaled potential with a unique product set at a time when the market will expand. Against these impressive metrics, management's core focus continues to be on organically growing the company. Despite disappointing results due to low order take in the third quarter, we remain optimistic about our business and the pipeline of opportunities we are pursuing and the strong momentum we are having in our core target market, the defense space. In addition, we have maintained a strong balance sheet and do not envisage the requirement for new capital to fund our growth plan. Our Marine Technology Business has two business models. These are the outright sale of our technology and rental and associated services. The main reasons we have not met our third quarter financial goals are: firstly, although our Marine Technology Business continues to increase its quality of pipeline of opportunities, order conversions have slowed, principally outright sales from Asia and, in Europe, for rentals and associated services due to a fall in the number of offshore wind projects; secondly, our UK services business has also experienced significant delays in receiving orders because the priorities of its defense customers temporarily shifted to land-based defense applications to support the requirements in Ukraine. This has affected naval requirement projects, the areas where we provide our solutions. Turning to the company's outlook for Q4. Although we continue to be profitable at the end of this third quarter, we are behind on our full year 2023 business plan financial goals. As a reminder, we had been working to a revenue plan of $26 million overall for fiscal 2023. Due to the delays we have experienced year-to-date in converting opportunities into firm orders, we are reforecasting fiscal 2023 and now believe our results will be more in line with our financial year 2022 results. We continue to be laser-focused on our core strategy to grow the business, and as management, we remain completely committed to this. As we focus on growing the business, we continue to believe we have significant opportunities around our Echoscope PIPE and DAVD solutions, including spin-off products such as the DAVD Digital Audio standalone product. I'd now like to summarize our third quarter results. In the third quarter, our Marine Technology Business order intake was down significantly. This is due to two reasons: First, we have seen a slowdown in new European offshore wind projects being initiated. This has impacted our rental and associated rental services revenues. It is widely reported, including on Bloomberg, that the cost of these fixed-price offshore wind projects has soared 40%, compounded by higher interest rates, thus requiring renegotiation. Our Echoscope cable monitoring and laying solution is used in this market. Second, we also saw reduced order take in key geographies, Japan, China, and South Korea. In these geographies, our technology is used primarily in underwater construction and offshore wind applications. Though we have continued to increase our pipeline of opportunities and believe that our inquiries and quotation levels are good, we have experienced significant delays in converting these into orders for the business. As a result of these factors, revenue fell in the Marine Technology Business and was $2.9 million in the third quarter compared to $4 million in the previous third quarter of 2022. Despite the decrease in revenue in the third quarter, we do not believe that this is due to anything systemic or loss of our market position in the areas in which we excel. We believe it reflects the slowdown in offshore wind in the European market; the delays in European offshore service providers entering the U.S. offshore wind market, as reported by the likes of Orsted; and delays in converting opportunities emanating from Asia into firm orders. We believe that in the fourth quarter of 2023, we will see some of these opportunities materializing into orders. Within our current business strategy, the two pillars of growth for our company are our Echoscope PIPE real-time 3D imaging sonar and our recently launched Diver Augmented Vision display system, DAVD, which is in adoption by the U.S. Navy. I will therefore focus the rest of my remarks on these two pillars. Firstly, turning to the Echoscope and progress in this area in the third quarter. The underwater imaging sonar market is growing largely due to the new generation of underwater vehicles focused on bringing new capabilities to the subsea and underwater market. Recently, it was announced that the U.S. Navy has now standardized the Videoray Defender as its preferred solution in the small underwater vehicles category. In general, the new generation of underwater vehicles present new capabilities, which in turn is fueling the demand for more capable sensors such as ours. One of the key emerging requirements for the defense market for this class of vehicle is real-time 3D spatial perception and scene awareness technology. And in keeping with the U.S. Navy selection of the Videoray Defender, we were selected for executed trials on this platform with Naval Information Warfare Center, NIWC, in our third quarter. It continues to be our strategy to work on further increasing the number of new defense underwater vehicle programs in which the Echoscope technology is embedded, and trials like these are a key precursor to such success. In the third quarter, as part of a second phase defense navy program, we completed and delivered for customer evaluation a full survey-grade diver handheld solution, which embeds our Echoscope PIPE imaging sonar and the DAVD for the Navy and which will be used for high-resolution real-time 3D mapping and inspection in ship hull applications. Also, in the third quarter, a coordinated trial was planned and executed at the San Diego Naval Information Warfare Center, NIWC, facility to support the need for real-time 3D inspection and critical mapping from a small man-portable remotely operated vehicle, ROV. The trials flawlessly and successfully showcased the Echoscope's capability to perform real-time 3D inspection, target identification, and high-resolution mapping, as well as uniquely allowing the ROV pilot to fly the ROV in zero-visibility conditions using the live real-time 3D display from the Echoscope PIPE. In addition to the NIWC vehicles team, other U.S. and UK Navy attendees were able to witness the demonstration. Evaluation of the trial results is ongoing with different related departments. We also received, in the third quarter, very favorable mission results from three of our defense customers who have selected, integrated, and recently demonstrated our Echoscope technology on their subsea vehicles. These programs vary from small vehicles to larger vehicles, all greatly benefiting from the real-time 3D volumetric data unique to our patented Echoscope technology. Notably, as these defense customers have success with the technology on one of their programs, they take the same solution into other programs. For example, one defense customer has expanded the use of our technology on four different vehicle programs. We continue to believe that there is significant momentum around our Echoscope-based solutions. Secondly, now turning to our progress on the DAVD in the third quarter. As a reminder, the tethered DAVD system has now moved from the Navy's R&D phase to their field adoption phase. As part of the continued fleet rollout, in the third quarter, we performed two crucial training events. SWRMC in San Diego received their initial DAVD training as a new user group to the DAVD family. SWRMC is responsible for all ship maintenance and diver salvage in the busy San Diego area, and they have already been able to utilize the DAVD system on a live mission. Additionally, UCT in Port Hueneme received additional DAVD units. In the third quarter, we trained the Navy's newly appointed Field DAVD Super User, who has been brought onboard to work with the Navy DAVD Program Manager specifically to ensure the operational success of the newly fielded DAVD system. On an ongoing basis, we will support joint field missions as part of the Field DAVD Super User's onboarding process. During the quarter, we also supported U.S. Navy dive inspection and salvage operations in Maui in response to the recent devastating wildfires where the DAVD Echoscope Inspector System was used for real-time 3D mapping and monitoring of the underwater environment. In the third quarter, we continued to make progress on the two variants of the DAVD system, tethered and untethered. By way of progress on adoption, a major European offshore provider has completed its findings on the DAVD tethered system trials, which they performed in our second quarter. Quoting directly from their report, they concluded that, "The advantage of the DAVD alone, compass, depth, taking snapshots and presenting graphical information for diver and supervisor, or combined with a 3D live sonar video stream is clear and increases safety and efficiency. The 3D sonar fits well within our scope of work and our survey division is aware of this. We think that the combination of DAVD and 3D sonar has potential within our organization." This provider is one of the Big Four global dredging companies that together control 80% of the global dredging capacity and have confirmed their intention to adopt the DAVD, and we are working on a model for initial adoption. We also have made progress with the DAVD untethered variants. DAVD untethered prototype systems were delivered to our project sponsor earlier this year as part of their evaluation program. We have made further progress in this quarter and have been awarded initial further funding of approximately $750,000 out of a total contract value of $1.8 million. The scope of delivery for this funding is supplying eight evaluation systems and performing further customization work. This is significant because for the first time another foreign Navy has co-opted into the U.S. Navy DAVD program. We're still optimistic that this variant will move forward to field operation in financial year 2024, subject to successful completion of the evaluation stages, and we continue to focus on completing the funded customization work package. Turning now to trials and adoption discussions. We have good quality discussions ongoing with a second major European offshore provider where we have completed customization work necessary for their specific helmet and rebreather system, and we planned some field work with this customer later this year with the DAVD system. We also provided in the second quarter commercial terms to a major Japanese offshore construction company who is an established user of our Echoscope. We have since made further progress and have been invited to conduct a pre-adoption DAVD training with this customer later this month. Also, this month, we will also be demonstrating the DAVD to several interested Japanese customers in both the defense and the commercial sectors at the same time. We're also excited about the second phase trials with the Spanish Navy later this month in Alicante, Spain, which forms part of our continued DAVD World Engagement program. They are interested in both the tethered and untethered variants. We continue to believe that the likely inflection point for the DAVD is in financial year 2024 where we hope to have acquisition budget lines established with a broader customer base, including foreign navies and commercial offshore service providers. To restate, despite challenges with order take during the quarter, we have good traction and momentum behind our solutions and believe we have achieved key milestone targets around these. As we work towards closing fiscal 2023, we remain confident about our longer-term goals to grow the business, and we believe we are well positioned for this. Now, turning to our Marine Engineering Business. This business supplies sub-assemblies into broader mission-critical programs under contract with prime defense contractors. This gives them the opportunity to have repeat orders for these sub-assemblies through the life of the program. We continue to reiterate this segment is important for our group as we have a strong pedigree in defense engineering with stellar relationships with prime defense contractors spanning decades. These are important relationships for our growth strategy. There's also a strong crossover of engineering skills, which is vital for us to maintain our competitive lead in real-time 3D imaging sonar and our diving technology. Year-to-date, the UK part of our services business has experienced significant delays in receiving orders. This is largely due to their defense customers' priorities having switched temporarily onto land-based applications related to Ukraine, which has temporarily put naval-based requirements on hold. This delay has affected order take and has also contributed to our business being off plan. Approximately $2.5 million worth of orders anticipated in the first quarter of our 2023 financial year have not yet been released for the reasons outlined earlier. We will continue to work towards restoring the services business to its $10 million revenue profile over the next two years. Finally, before we discuss our third quarter financial performance in greater detail, I wanted to briefly mention our most recent leadership appointment. Last week, we announced the appointment of John Price as our new permanent Chief Financial Officer effective on November 27 of this year. John is joining Coda with more than 28 years of experience working in financial roles, having served as the CFO of NASDAQ-listed Assure Holdings Corporation since 2021. John brings a seasoned background in corporate finance and accounting, along with key public company and technology industry experience. We look forward to welcoming John to the company later this year, and we would like to thank Gayle Jardine for her work as Acting CFO in the interim.

Thank you, Annmarie, and good morning, everyone. Let me take you through our fiscal third quarter financial results. Starting with revenue. In the third quarter of 2023, we recorded total revenue of $4.9 million compared to $6.3 million in the third quarter last year, a reduction of 22%. The Marine Technology Business generated revenue of $2.9 million compared to $4 million, a 28.5% decrease from the prior-year quarter. As reported earlier by Annmarie, this decline in our consolidated revenue was a result of weak demand from strategic markets and geographies, such as Asia for outright sales and Europe for rentals, particularly in the offshore renewable sector. Our UK services arm was also affected by delays in receiving key orders due to its customers' focus being on land-based defense applications to support the Ukraine efforts and not the naval-based applications that apply to our business. Moving on to gross profit and margin. In the third quarter of 2023, we generated gross profit of $3.4 million compared to $4.6 million in the third quarter of fiscal 2022. Gross margin in the third quarter of 2023 was 68.8% versus 72.8% in the 2022 third quarter. In our Marine Technology Business, or Products Business, gross margin fell to 82.1% in the third quarter of 2023 compared to 86.7% in 2022 third quarter period, reflecting changes in the mix of sales and higher commission costs in the period. Our Marine Engineering Business gross margin increased to 50% this quarter versus 48.2% in the 2022 third quarter. Now moving to our operating expenses. Total operating expenses for the third quarter of 2023 fell slightly to $2.50 million compared to $2.54 million in the third quarter of 2022, driven by a slight reduction in both selling, general and administrative expenses and research and development expenses. SG&A remains below our targeted internal budget, largely because of reductions in staff headcount and targeted new hire positions remaining unfilled. Our selling, general and administrative costs in third quarter 2023 totaled $1.9 million and remained in line with the previous '22 third quarter. As a percentage of revenue, our selling, general and administrative costs for third quarter 2023 were 39.6% of total revenue compared to 31.3% in the third quarter of fiscal 2022. Looking forward on our cost structure, given the significant progress we've made in R&D in the last four years, we remain focused on aligning a significant portion of our resources and strategy from research and development to global business development, brand building and investor relations. We expect SG&A to increase on a full-year basis as we hire new staff and expand our management team. We believe we've developed world-class products and solutions that provide market-leading positions for Coda and that we can make meaningful progress in our markets through these investments to create shareholder value. Operating income in the third quarter of 2023 was $0.9 million compared to $2 million in the third quarter of 2022. Operating margin was 17.6% compared to 32.3% in the third quarter of 2022, driven by the change in revenues as explained previously. Net income before taxes in the third quarter of 2023 was $1.1 million compared to $2 million in the third quarter of 2022. Net income after taxes in our third quarter 2023 was $1 million, or $0.09 per diluted share, compared to $1.8 million, or $0.16 per diluted share in the same quarter last year. Moving now to our balance sheet. As of July 31, 2023, we had $24.9 million in cash and cash equivalents on hand and no debt. This represents an increase of $1.4 million in cash in the third quarter and an increase of $2 million in the nine-month period year-to-date of 2023. That completes my financial summary. Now, I will turn the call back over to Annmarie for closing remarks.

Thank you, Gayle. As stated previously, although in the third quarter we are behind in our business plan, we continue to be profitable and are focused on executing our existing plan and growth strategy. We have significant momentum around our growth pillars and again our focus is converting these into tangible near-term opportunities for the business. Management will continue its efforts to explore the rental and lease model for the DAVD system with the objective of galvanizing market adoption. We also have a near-term growth catalyst from the digital audio communication module, which has progressed in this quarter. If we're successful with this module, it will provide the company with diversification of revenue, which counterbalances the longest sales cycles of both the Echoscope and the DAVD and potentially adds a good stream of additional revenues for the company. We have a demonstrated track record of consistent profitability and we have a solid unleveraged balance sheet with cash on hand and no debt, which gives us confidence in our outlook for Coda. Furthermore, with our solid balance sheet, we do not envisage needing additional capital for the growth targets we have set out for the next two years. To conclude, our management remains committed to executing the company's growth strategy and delivering value for our shareholders. We're now happy to take your questions.

Thank you. Our first question is from Brian Kinstlinger with Alliance Global Partners. Please proceed.

Hi, Annmarie. Thanks for taking my questions. First, looking at the 10-Q, you've been clear the revenue from Asia has been pressured for two consecutive quarters, and you highlighted the slower conversion of proposals to orders. Do you expect these trends to continue given the challenging economy in Asia or are there signs that this slower conversion is temporary?

Well, we've got a really strong customer base in those geographies. Well, everything that we see, these are delays, and the opportunities for the business have not gone away. So, we remain confident and we still see at the beginning of our Q4 revalidation requests coming in. So, I certainly believe that, in Q4, we'll get some of those orders and certainly, in Q1, we would expect some of these orders to also come through. So, overall, I think these are more delays than they've gone away, Brian.

Great. And then, on the DAVD, the tethered side, sounds like you've got a lot of training. Is that ramped in command centers? And then, you highlighted at the end the interest in Japan and Europe. And then, you mentioned an inflection point in fiscal '24. First, is that the beginning of the year? Do you think that's more towards the end of the year? And help us understand what that means in terms of a revenue range? Is it going to be much more significant, do you think? I'm just trying to understand what that inflection point really means.

Well, look, I mean, this year we set out to do something like $2 million of DAVD revenues. And I think that we have met that actually, and we've exceeded that a little bit. What I see, as you've rightly said, the tethered version is now fielded. This is now an item that's open for purchase by any command in the U.S. So that's very good news for the business. In addition to that, what we're seeing is that, as I mentioned, is that we've got one European major offshore service provider having conducted rigorous trials and have confirmed that this could be game-changing for their organization and their intention to adopt the DAVD. We also have pre-adoption discussions in Japan. And later this month, we will be running training with a major Japanese customer that we think will adopt the DAVD in this calendar year. So, I think we have a swell of good activities around the DAVD and we do expect that, that will be a significant part of our revenues in 2024. On the untethered version, I would expect that to be more the backend of 2024, because, as I pointed out earlier, I think that program has moved forward. I'm very, very excited about that because for the first time, Brian, we have a foreign Navy jointly funding the program and having their own requirements in the U.S. work package. And we've always said that one of the paths to adoption will be the U.S. Navy itself working with foreign navies on adoption, and we're seeing that coming through. So, I am really, really excited about the progress. I mean, in this quarter, we were funded to the tune of $750,000 of a $1.8 million contract, and part of that is for eight evaluation systems, and the other part is for some customization work for the Navy. So, I'm really excited about the DAVD, the prospects for the business for the DAVD. And I think we're making really, really good progress because a number of things happened in this quarter. As I said, we've got a European major offshore service provider being happy about the trials. We also are doing pre-trial training in Japan. Also at the same time, demonstrating the capability to a wide breadth of Japanese customers. So, I feel really, really excited about where we are with the DAVD. And I do believe that the biggest opportunity we have with the DAVD, as I've always said, is going to be the untethered version. And therefore, what we are seeing now with that variant is that it's moving into its second evaluation phase, which is that they've bought evaluation systems and we're doing some customization work for them.

And quickly a follow up on that. How long do you think evaluating those eight units takes? Is that a couple of months? Is that a couple of quarters? How do you think about that?

This is why I said that I really think that we will really start seeing the impact of revenue impact, because we've started acquiring systems. I feel that's going to be more in the backend of 2024.

Got it. Okay. And then in terms of your revenue goals, you highlighted, obviously, this year you're behind plan. Your first year, I'm curious, do you think you're one year behind plan given all these catalysts? Are you a little bit more than that given the market conditions? And then, secondly, your full year outlook suggests the fourth quarter is much stronger than the third quarter. Is that because of these orders starting to convert? Or is it more what you highlighted the digital audio module is going to offset the weakness that you're seeing right now?

No, Brian, some of the delays. We expect orders from Asia to start coming in the fourth quarter. As mentioned, we are seeing activities around revalidation of our proposals, which looks strong for the fourth quarter. I believe our overall results in the fourth quarter of 2023 will align more closely with our 2022 results. While we may not have grown as initially intended, our growth strategy remains intact. Despite challenging market conditions, the business continues to show profitability, and I believe earnings will remain solid. The opportunities in our pipeline give me excitement about our growth strategy, especially in areas where we can make a significant impact. The number of underwater vehicles utilizing our technology is linked to the defense sector, which operates under a different budget than the commercial market that is affected by wider macroeconomic factors. Our focus is on expanding opportunities in the defense market, where we anticipate repeat revenues. We are observing increasing traction around our technology in this space. We have strong business development activities related to the Echoscope, including exclusive events where we showcase our technology on new platforms. Our technology is gaining recognition in the defense sector, and we are achieving success. This is why I remain confident in our growth strategy and plans for the business. While I cannot predict exact market conditions, I am excited about the quality of our engagements, which are showing promising results. I am looking forward to next year.

Thanks. Just one point of clarification, and then that's all I've got. I just want to make sure I understand. We're halfway through the October quarter. Are you saying the conversions have started to already happen? Or you expect they're going to happen in the next six to seven weeks?

No, look, as I said, just to be clear, so what we did in year-to-date as a business, we've done something like $15 million. For the rest of the year, I think that we are going to be doing something like $5.5 million. So, more in line. Overall, our results look more to be in line with $21 million for 2023. So that's what we can see today for our last quarter.

Our next question is from Walter Ramsley with Walrus Partners. Please proceed.

Oh, thank you. Got a couple of questions. Is the company investigating any strategic alternatives?

Strategic alternatives? Hi, Walter, what do you mean by strategic alternatives?

Well, I guess not. Okay. The fourth quarter is coming up, do you have any intention or have you begun to consider any way establishing reserves or doing any write-offs? The inventories are up to like $11 million now. So, anything that could happen there?

No, not at all. I mean, as you know, I mean, a lot of our inventory, the makeup of our inventory, Walter, has to do with our Echoscope technology, our DAVD technology. So, we don't see the use. And also our particular design for those systems, I don't see the use case for writing off inventory at all. None of the inventory we carry as such is obsolete inventory. So, we don't have any plans to make any reserve at all, because we think our inventory is current.

Okay. And just one last thing. If you could possibly elaborate, if you know the answer anyhow. It just seems preposterous to somebody on the outside that the U.S. Navy would allow its R&D operation to be hijacked by the Army to work on land-based systems. Can you explain what's going on there?

Well, no. I think it's just a matter of their current situation. The fighting forces are focusing on aircraft and land-based defense rather than naval defense in Ukraine. That's really the core of the situation. They are not currently involved in mine removal, as you might have seen reported. Instead, they are predominantly using land-based defense systems. This shift in priorities poses a challenge for our business, but it's important to note that these priorities haven't disappeared; they've simply changed for now.

Well, okay, I'll accept that I guess, but it still sounds a little crazy. And I guess one more. Excluding the military, you did obviously point out offshore wind is a big problem and everybody knows that. But as far as a lot of the other vertical markets the company used to focus on at any rate, I mean, are they all under pressure as well? Or is this due to the interest rates you think? Or is it just the offshore wind?

Well, it's not just the offshore wind that we're discussing. When you look at the breakdown of our results year-to-date, equipment sales have increased by 3.9%. For instance, reinforcement of our growth pillars includes DAVD and the solution where we provide steam pressure or softening rentals, which are down by 36.9%. Software sales, which accompany our hardware, have risen by 13.4%, while services that are part of our rental package and certain customization work are down by 36.9%. The softness we are experiencing in the market is primarily related to offshore wind. A significant part of the issue is that some major European offshore developers have been slow to enter the U.S. market, and they possess the necessary expertise. These delays have not completely disappeared; they have just shifted for the moment.

No, I understand all of that. I mean the wind situation is something I’m familiar with living in Cape Cod. However, I was thinking more about areas like oil and gas mapping, salvage, dredging, bridge inspection, and port security. Are those also seeing a decline?

What we see in the numbers indicates a softening in services, but equipment sales have actually increased year-to-date. I think construction applications in Japan might experience a slight slowdown, but these are more likely delays in projects rather than cancellations. In the oil and gas sector, we've seen growth this year; our Marine Technology Business, which had 1.3% in oil and gas last year, has risen to 4.5% this year. It's a mixed situation overall. The primary challenge has been in offshore renewables and in certain strategic regions, particularly Asia, where we have noticed a slower rate of conversion. However, I do not see a decrease in our inquiry levels. We are generating a solid amount of quotes in those markets, although they are taking longer to convert into firm orders.

Okay. That's very helpful, Annmarie. Thanks for answering the questions.

No problem, Walter.

Our next question is from William Bremer with Vanquish Capital Partners. Please proceed.

Good morning, Annmarie.

Good morning, Bill.

So, my question tails with Walter's. Would you mind providing us your initiative on the U.S. commercial market? Given the infrastructure bill, which targets bridge work, including oil and gas offshore, now that the commodities are approaching $90 a barrel domestically here, surely I would assume that your products there are needed.

They might be needed, Bill. As I mentioned, we're seeing strong levels of inquiries both globally and in the U.S. However, it takes time to turn some of these inquiries into sales. I'm optimistic about the technology in the areas you've mentioned. We are engaged in business development activities worldwide, but converting opportunities into orders can be time-consuming, especially for high-value equipment costing $250,000. It's not a sale that happens overnight.

I think the question I was asking was, on the corporate level, do you have specific targeted sales personnel going after the U.S. market, which, at this time, is far advancing especially in the capital initiatives on the oil and gas and offshore markets here versus Europe?

We're always looking for good people, Bill, to join our team. We continue to build our team. Sales and marketing are a big part of our effort, but we have to find the right team to put in place. I mean, recently, we've just expanded our management team. We've just formed a new digitalization team that we've hired three people into the digitalization team for Coda Octopus. And we continue to look for the right business development people to join our business, but it has to be the right people. So, we do have salespeople, and we are looking to expand the team, but we do have to find the right people to bring on board, and that's been through this year.

Well, I thank you for that, and I'm looking forward to seeing some growth. Thank you.

Thank you, Bill. Thank you.

Thank you. This will conclude the question-and-answer session. I would like to turn the call back over to Annmarie for some closing remarks.

Thank you for joining our call today and for your interest in our company. Have a great rest of your day.

Thank you so much. Thank you, everybody, for joining us today for Coda Octopus' conference call. You may now disconnect.