Good morning and welcome to Coda Octopus Group's Fiscal Year 2025 Earnings Conference Call. My name is Shamali and I will be your operator today. Before this call, Coda Octopus issued its financial results for the fiscal year ended October 31, 2025, including a press release, a copy of which will be furnished in a 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, Anne-Marie Gale, its interim CFO, Gail Jardine, its president of technology and director, Blair Cunningham, and Dylan King from their investment relations team. Following their remarks, we will open the call for questions. Before we begin, Dylan King from the company's internal investment relations team will make a brief introductory statement. Dylan, please proceed.

Thank you, operator. Good morning, everyone, and welcome to Coda Octopus's fiscal year 2025 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 may be 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 for year-ended October 31st, 2025, and Forms 10-Q for the first, second, and third quarters of our fiscal year 2025. You may get Coda Octopus's 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's website. Finally, as a reminder, this is our Fiscal Year 2025 reporting in all comparisons unless explicitly stated otherwise, are with our fiscal year 2024. Now, I will turn the call over to the company's chair and CEO, Anne-Marie Gale. Anne-Marie.

Thanks, Dylan, and good morning, everyone. Thank you for joining us for our fiscal year 2025 earnings call. Despite a challenging global policy environment, our consolidated net revenue in fiscal year 2025 increased by 30.7% and I believe that we have delivered a solid set of results. For those who are new to the Coda Octopus story, our business is made up of three discrete business operations, the marine technology business, the defense engineering services businesses and our recently added acoustics, sensors and materials business units within our group our core business is the marine technology business this business generates most of our revenue and in the fiscal year 2025 it generated 49.8 percent of our consolidated net revenue it is around this business that we are building our growth strategy. The marine technology business operates in the subsea market and is home to key disruptive underwater technologies. These technologies are bringing the smartphone revolution underwater by providing a comprehensive real-time information platform which provides vision underwater and allows our customers to make real-time decisions. This technology is a key enabler for the rapidly emerging AI-enabled autonomous capability required by the subsea market as it provides real-time 3D perception underwater. The specific addressable markets which are of relevance are the imaging sonar market and diving market. It is these market segments that our growth strategy is built around. Turning to our flagship imaging sonar, the Ecoscope. The Ecoscope is a real-time three-dimensional volumetric imaging sonar that can generate a real-time three-dimensional image underwater in zero visibility water conditions. This is widely used in the commercial offshore marine market for a range of underwater applications. A significant part of our annual revenue is derived from the commercial offshore marine market. To achieve the growth that shareholders want to see from our company, we have to increase our market share for underwater imaging sensors in the defense space. There are many ongoing defense programs globally where new classes of underwater vehicles are being adopted. Significant budgets are appropriated for this. The Ecoscope's uniqueness of being a single sensor for multiple undersea activities presents a significant advantage over other technologies. It allows the consolidation of multiple sensors into a single power-efficient unit without compromising the various missions to be executed. We recently launched our next generation of ultra-small form-factor three-dimensional sonars, the NanoGen series. The three-dimensional sonars within our Nanogen series are a shade bigger than a smartphone and have been specifically designed for the emerging small-class underwater platforms encompassing manned-on-manned surface, subsurface, and fully autonomous robotic vehicles. The addition of the Nanogen series allows us to address a larger swathe of the imaging sonar market. Our second key technology is the DAVID, the Diver Augmented Vision Display System. The DAVID provides a real-time information platform for diving operations, increasing safety and efficiency. The addressable market for the David technology includes both the defense and commercial diving sector. The untethered David variant addresses the special forces type of divers and we believe constitutes the largest addressable market for the technology. The David tethered system is already operational and is now the subject of focused business development effort to get broader adoption. The untethered variant of David, which we believe constitutes the largest addressable market for the David technology, has been the subject of a multi-year hardening program, which we successfully concluded in fiscal year 2025. Following the successful conclusion of this hardening program, we delivered a small batch of 16 new generation on Tethered David systems. This variant is now going through approved Navy use assessment, which we believe will be the catalyst for broader adoption of the technology. We're also pleased with the acquisition of Precision Acoustics Limited, which is a recognized leader of acoustics and measurement centers widely used in the medical sector. The addition of this company expands our expertise in underwater acoustics, which is critical for maintaining and extending our lead in real-time 3D imaging underwater. It also positions the group to compete for larger defense contracts. Now turning to fiscal year 2025 highlights relating to our core business, the marine technology business. This business sells its products and solutions worldwide. Key highlights in the period include this business increased revenue by 3.2 percent In respect of its revenue structure in the 2025 period, 46% of revenue was generated from the defense sector, with 54% from the commercial marine sector. 71.9% of revenue generated by this business relates to Ecoscope, and 28.1% relates to David. it. Hardware sales increased by 30.5 and were 9.5 million compared to 7.2 million in the previous fiscal year. Hardware sales to Asia, a strategically important market for this business, increased by approximately 7.7% and were 5.9 million compared to 5.5 million in the previous fiscal year. Rental assets were significantly underutilized in fiscal year 2025, resulting in lower units of rentals and associated services. This also impacted on the gross profit margin of this business. This reflects the change in U.S. policy on funding for offshore renewables, which caused many projects to be shelved, as reported by Shell, Orsted BP, and others. Now, turning to highlights relating to the Defense Engineering Services business, in the fiscal year 2025, our Defense Engineering Services business revenue increased by 5.6%. This business has longstanding relationships with prime defense contractors and has served the defense market for close to 50 years. It is reliant on receiving funding on the defense programs. During the fourth quarter, it experienced delays in receiving contract awards due to the U.S. government shutdown, followed by the use of continuing resolutions to fund these programs. The success of the defense engineering business is dependent on increasing the number of defense programs that they sell proprietary parts into. Now turning to highlights relating to the newly acquired Precision Acoustics Limited, in the fiscal year 2025, this business unit contributed 20.4% to our net consolidated revenue. We continue to be very pleased with this acquisition and reiterate that it positions the group to collectively respond to larger defense requirements, particularly in the underwater acoustic space. We continue to make it our priority to focus on executing our growth strategy. Blair Cunningham, our President of Technology, will be updating you on our progress and various milestones around our core technologies which underpin our growth strategy. I will now turn the call over to Blair Cunningham.

Thank you, Anne-Marie, and good morning, everyone. Today, I will focus on progress that we have made around our core technologies, Ecoscope and David. In fiscal year 2025, we saw increase in sales of both Ecoscope and David, and we also saw strong interest from the defense community. The Ecoscope, our flagship technology, the Ecoscope, continues to represent the largest opportunity for scalable growth, particularly within the defense and security market. This sector is being fundamentally reshaped by the widespread adoption of next-generation underwater platforms, encompassing manned, unmanned, surfaced, subsurface, and fully autonomous robotic vehicles. The defense subsea market is moving away from large, bespoke platforms towards smaller, networked, and increasingly autonomous vehicles that can be deployed at scale. This transition favors technologies that maximize performance per unit cost and enable rapid production, modular upgrades, and multi-mission flexibility. A significant portion of these new programs is focused on reducing reliance on human-in-the-loop supervision and control for mission-critical decisions. The launch of the Ecoscope IPE nanogen series, our ultra-compact real-time 3D imaging sonar, marks a critical step in enabling next-generation subsea AI-enabled autonomy. As the subsea industry moves away from vessel-intensive, human-in-the-loop workflows, NanoGen series provides the real-time 3D perception required to unlock scalable, software-driven autonomy across a growing range of platforms. NanoGen series delivers true, real-time 3D imaging in an ultra-compact form factor, enabling autonomous systems to perceive, navigate, and make decisions independently underwater. Unlike traditional sonars designed primarily for data collection, Nanogen series functions as a core perception sensor for AI-enabled platforms, supporting navigation, obstacle avoidance, target guidance, and adaptive mission execution without reliance on bandwidth-limited communications or post-processing. A single nanogen series sensor supports multiple high-value use cases, including subsea navigation, inspection, 3D modeling, subsea imaging, change detection, and gas and oil leak detection, allowing operators and platform developers to consolidate hardware, reduce integration complexity, and lower total system costs. This multi-mission flexibility positions NanoGen Series as a platform agnostic technology, accelerating adoption across AUVs, ROVs, hybrid vehicles, resident subsea systems, and future autonomous fleets. NanoGen Series is aligned with the strongest growth drivers in the subsea market, autonomy, edge AI, reduced operational cost, and scalable deployment. By enabling higher levels of autonomy and mission efficiency with a single compact sensor, NanoGen series strengthens Ecoscope role as a critical technology provider to the next generation of intelligent subsea platforms. We're seeing strong and accelerating interest, supported by highly successful trials with a number of key defense customers, including the U.S. Navy and several allied foreign navies across their respective subsea vehicle programs. These engagements span next-generation platforms designed for multi-mission operations, combining manned and autonomous capabilities within a single operational framework. By working closely with naval special operations forces, Program sponsors and platform and control system manufacturers, we ensure our technology is aligned with real operational requirements and emerging concepts of use. This collaborative approach enables us to demonstrate best-in-class performance and rapid integration across diverse subsea platforms. As the market continues to transition away from traditional, single-purpose sonar systems towards intelligent, AI-enabled perception, our solutions are increasingly viewed as a core-enabling technology for future subsea autonomy, situational awareness, and mission flexibility. We anticipate that procurement and program decisions for the active opportunities in which we have already completed end customer demonstrations and operational trials will be made in early 2026. These programs are currently progressing through the final stages of technical evaluation, operational validation, and internal budget approval within the respective defense organizations. Subject to successful contract awards, we expect initial deliveries to commence within the 2026 fiscal year, aligned with customer deployment schedules and platform integration timelines. These programs are structured to support multi-mission subsea vehicles with both manned and autonomous operating modes, providing a strong foundation for follow-on orders, platform expansion, and long-term fleet adoption. Given the strategic importance of these programs and the shift toward AI-enabled next-generation subsea capabilities, we've used these near-term decisions as a meaningful inflection point with the potential to convert demonstrated technical leadership into recurring production contracts and sustained growth. While these active programs are presently focused on 3D perception, navigation, and obstacle avoidance enabled by the NanoGen series, they represent longer-term growth opportunities for our David augmented vision display solutions. Many of these subsea vehicle programs support diver operations or involve manned subsea platforms, both of which align directly with the target applications and markets for David. Turning to the other significant pillar of our Growth Strategy, DAVID, our Diver Augmented Vision Display, this system is a cutting-edge augmented reality technology purpose-built to enhance diver safety, performance, and situational awareness and low visibility and technically demanding underwater environments. In fiscal year 2025, we experienced real momentum around DAVID with increased domestic interest from non-Navy defense organizations and government agencies, as well as from several foreign navies and commercial diving entities. We were contracted under several programs and successfully delivered multiple next-generation David systems to this expanded user base and will continue to support, educate, and drive further adoption of these systems within this community. David is being leveraged as a critical life support and visualization component. enhancing diver safety and mission effectiveness by delivering real-time life support data via the David head-up display, and 3D situational awareness through the compact Ecoscope Pipe Nanogen Series Sonar. These initiatives exemplify the growing recognition of David and Ecoscope technologies as mission-critical tools in the evolving landscape of advanced military diving and underwater operations. During the fiscal year 2025, we completed the funded dust hardening program under which the David technology was jointly funded for adoption for the special forces market by the U.S. and a leading foreign Navy. Following the successful completion and delivery of the dust hardening program, we were awarded the initial order of 16 new generation untethered David systems in fiscal year 2025 for fleet evaluation by U.S. Special Forces. These systems are the culmination of extensive field testing and direct feedback from operational divers funded under the dust hardening program. Following the delivery of the initial production run of 16 David untethered systems for the U.S. Navy Mark 16 rebreather system in fiscal year 2025, the untethered David variant is undergoing final approval of the U.S. Navy's authorization for Navy use, or ANU, approval process. Following completion of this process is expected to support ongoing broader operational use and adoption of the untethered system. The David and Tevitt system continues to be refielded across an expanding community of EOD and Special Forces diver units for fleet evaluation and mission-specific tasking. The David and Tevitt system remains the largest growth opportunity for this transformative technology. For context, in the United States alone, there are approximately 14,000 divers within the potential government and defense user community for the David untethered system. fiscal year 2026 is an important year for the company in terms of reaching new milestones such as broader adoption of david by foreign navies and ecoscope technology being adopted on some of the new economist ai enabled platforms as a core perception sensor for navigation obstacle avoidance and target guidance i will now turn the call over to amory and we'll be available to take your questions thank you blair let me now turn the call over to our interim cfo

gail jardine to take you through our financials for fiscal year 2025 before i provide my closing remarks thank you and good morning everyone let me take you through our fiscal year 2025 financial results.

Starting with revenue, in fiscal year 2025, we recorded total revenue of $26.6 million compared to $20.3 million in fiscal year 2024, an increase of 30.7%. Our core business, the marine technology business, generated revenue of $13.2 million compared to $12.8 million, representing a 3.2% increase over fiscal year 2024. Our acoustic sensors and materials business, which was added to our group in October 2024, recorded revenue of $5.4 million in fiscal year 2025 and added 20.4% to our consolidated net revenue. Our defence engineering business generated revenue of $7.9 million compared to $7.5 million. representing a 5.6 percent increase over fiscal year 2024. Moving on to gross profit and margin. In the fiscal year 2025, we generated gross profit of 17.7 million compared to 14.2 million in the fiscal year 2024. Consolidated gross margin was 66.5 percent versus 69.8 percent in fiscal year 2024. This 3.3 percentage points decrease is mainly due to the impact of the lower margin acoustic sensors and material business being added, which accounts for two percentage points, as well as mix of type and geography of sales in our core business. In our marine technology business, gross margin decreased to 74.5% in fiscal year 2025, compared to 77.9% in fiscal year 2024, reflecting the mix of type and geography of sales, with 30.5% more units of hardware sale compared to a reduction of 36.6% in the higher margin rental sales. The acoustic sensors and materials business realized gross margin of 58.6%. Our defence engineering business gross margin increased to 58.6% in fiscal year 2025 versus is 55.8% in the fiscal year 2024, again reflecting the mix of engineering projects during fiscal 2025. Now looking at our operating expenses. Total operating expenses for the fiscal year 2025 increased by 24.0% to $13.1 million, compared to $10.6 million in the fiscal year 2024. The main factors for the increase in total operating expenses were the addition of Precision Acoustics Limited into the group, which added 22.1% to these costs, as well as the weakening of the US dollar against the British pound and Danish krona, which impacted on these costs when translated into US dollars from the base currencies for reporting purposes. Our selling general and administrative costs in the fiscal year 2025 totaled $10.7 million, an increase of 27.9% from $8.3 million in fiscal year 2024, reflecting the addition of the new business unit into the group and the inclusion of the earn-out provision as per the Precision Acoustics Limited Acquisition Agreement. SG&A as a percentage of consolidated net revenue in fiscal year 2025 was 40.2% compared to 41.1% in the fiscal year 2024. Operating income in fiscal year 2025 was 4.5 million compared to 3.6 million in fiscal year 2024, an increase of 26.6%. Operating margin was 17.1% compared to 17.6% in fiscal year 2024, which we attribute to the impact of the overall increase in our total operating expenses by 24.0%, in conjunction with an increase in consolidated net revenue of 30.7%. Pre-tax income in fiscal year 2025 was $5.5 million, compared to $4.6 million in fiscal year 2024. Net income after taxes in fiscal year 2025 was $4.1 million, or $0.37 per diluted share, compared to $3.6 million, or $0.32 per diluted share, in fiscal year 2024. In fiscal year 2025, we've provided for a current tax expense of $1.1 million, compared to $0.7 million in the fiscal year 2024. Switching now to our balance sheet. As of October 31st, 2025, we had $28.7 million in cash and cash equivalents on hand and no debt. This represents an increase of $6.2 million from October 31st, 2024, where the comparable figure was $22.5 million. Total assets increased by $6.9 million to $64.5 million in fiscal year 2025. To summarise the financial impact in the fiscal year 2025 of the introduction of the acoustic sensors and materials business into the group, it contributed 20.4% of net consolidated revenue and 18.0% to gross profit. The gross profit margin for this business was $3.2 million, or 58.6%. Thank you. That completes my summary. So let me turn the call back over to Anne-Marie for her closing remarks.

Thank you, Gail. I am very pleased with the increase in revenue in the fiscal year 2025 and our overall financial results, including earnings per share. I'm also pleased with the progress we're making against our key milestones for growing our business. Some of these include, in respect of our revenue structure, we increased sales in the defense sector, where 46% of our core business revenue emanated from the defense sector and 54% from the commercial marine offshore sector. realizing sales of 3.7 million relating to david in the fiscal year 2025 successfully completing the david hardening program which paves the way for broader adoption of the david technology by the military diving market subject to receiving approved navy use status the launch of our nanogen series sonar which we believe is well positioned as a core real-time perception sensor in the rapidly emerging ai-enabled autonomous and semi-autonomous platforms in the subsea market and finally receiving our first order from a highly influential European foreign navy for the David on Tethered system. We certainly believe that fiscal year 2025 was critical for completing key development activities under the David program, which were a prerequisite for broader adoption, as well as for launching the Nanogen series, which positions us to support a growing range of AI-enabled subsea robotic and autonomous systems. In terms of cash deployment, we will continue to prosecute our M&A strategy in fiscal year 2026, and we are continuing to build our M&A pipeline. We are very keen to close another acquisition in fiscal year 2026. Through our strategy, we aim to pivot the revenue model of the marine technology business towards a multi-year program-based adoption model, which supports recurring multiple sales on the programs of records and long-tail revenue, as we have started to see with the David products line. We continue to work to create stable long-term shareholder value and execute against our strategy to grow the business, which is our single biggest priority as a group. To conclude, we would like to thank our shareholders for their continued support. We're now happy to answer any questions.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line in the question queue. You may press star 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing these start keys. One moment, please, while we poll for questions. Our first question comes from the line of Brian Kinsmanger with Alliance Global Partners. Please proceed with your question.

Great. Thanks for taking my questions. This is Kevin for Brian. First, we were hearing about certain deliveries to the Indian Navy through the International Prime. What COTA products were shipped to the Indian Navy, and is this a brand-new customer, or have you worked with the Indian Navy in the past? And then, broadly speaking, do you see any significant opportunities within India in the near and medium term?

Sorry.

Thanks very much for that question. I'm not clear the Indian Navy. I'm not sure where that has come from.

Okay. Maybe I must be mistaken.

I can move on to a different one. Can you update us on the progress in Europe? I believe you delivered two untethered systems to a European Navy. How is the satisfaction, and do you expect larger orders ahead from the Navy?

Right. Thank you very much for that question. So I'm really, really excited about that development. As we mentioned earlier, we've completed the David Untethered Hardening Program. That's really the precursor to broader adoption. So what we really feel at this stage on the David technology, which is one of our key pillars for our growth, we feel that we've spent last year focused on completing the heartening program and delivering systems to the U.S. Navy. Really, now we're really waiting for that to complete the approved Navy use status, which then means the product will be operational and will be the catalyst for broader adoption. Then pivoting from outside of the U.S., really this year what is really key for Code Octopus is broader adoption of the technology outside of the U.S. And in our fourth quarter, we delivered two systems to a very, very influential European Navy, and we will be providing training to that Navy in our Q2, and then we believe that will be the catalyst for further adoption of the David-on-Tethered system. So we're really, really excited about that, and we're waiting to support that customer. And we would expect Q3, Q4 would be where we start understanding opportunities for that customer.

Thanks. And then can you quantify cumulative deliveries of the untethered data system? And last quarter, I believe you said...

Sorry, could you repeat that? Could you what? Sorry, could you repeat that?

Yeah. Could you quantify the cumulative deliveries of the David Untethered system? And I think last quarter you said your target was $3.5 to $4 million of David in fiscal 2025. Did you achieve that? And then given the progress you're making, what kind of range do you expect for David contribution to revenue in fiscal 26?

So in fiscal 2025, we did $3.7 million for David, and for 2026, really, of course, our internal business plan presupposes that we beat this. However, it's really difficult to see, as we're waiting for completion of the assessment of the approval, the approved Navy use status for the product, which is the prerequisite for the product being operational. So we expect, really, to have that close to the end of Q2. And really Q3 and Q4 is really where we can really start understanding what revenues will be for the untethered variant in 2026. So day-bid revenue will be lumpy and back-ended to third quarter and fourth quarter for the simple reason that until it goes through, we've delivered the evaluation systems and until it gets on the annual list, which is the approved labor use list, it's very difficult for us to quantify what the budget is going to be. In addition to that, though, we're really focused on, as I said this year, getting broader adoption for the David technology outside of the U.S. So we feel we've done all of the development programs. We've got good understanding of where the trajectory of the product in the U.S. We're pretty much waiting for budgets and waiting to understand the budget line appropriation. programs are now being funded by continuing resolutions. So we really don't know what 2026 U.S. budget is going to be. There will be budget, but we don't have the ability of that right now. But that aside, we take that as a given, and we presuppose that we're going to beat our 3.7 million, but we're really laser focused now on the broader adoption now that we've finished the development program, broader adoption outside of the U.S. And this delivery to this European Navy is really a pivotal moment for the technology because this is really a trendsetter Navy in Europe. So we're very excited about that. So I can't say what our target is. I really don't know because we're waiting for budget allocation in the U.S. But I think what we're saying is that we did 3.7 in fiscal 2025, and we anticipate beating that.

Great. Thank you.

And then can you quantify how many foreign navies have tested or are testing, David? And once you get in the door, can you discuss the sales cycle? How long might that occur and then timeframe for deliveries? and then what would be a reasonable assumption for large-quantity sales.

Blair, did you want to talk about just broadly the business development activities with the broader Navy community?

Absolutely, yeah. I think it's been critical in both 2025 and prior to that that having a very close relationship with the U.S. Navy is critical for the product because, as Amri stated, having the ANU authorization for naval use is critical for the rest of the navies to understand that this is equipment and that they can put straight to budget lines and move forward. In terms of the number of physical navies where we've presented this product to, typically in diving, we've been involved in a number of what I would call worldwide Navy collective missions, including RIMPAC, for example, which is in Hawaii, at which point even at that single event, I think we had 10 different country navies diving the system. That's obviously not a statement that all 10 of those navies have budget and can move forward with that, but it gives an idea of the number of entities that we're working with. I think it's probably easier to focus on the European sector because that's much more you know being defined and of the navy who deliver the system you know i've personally been working with them for the last two years just to give you an idea of the gestation cycle and now that the product is coming close to being uh you know anu deliverable they are making their early investments uh into the program but they are very very committed i think they're influential Also, such that that particular Navy has a very strong investment in Navy diving of all factors, so that's special forces, hard hat diving, salvage, for example, which we cover all bases. But they are incredibly well-connected to all of the neighboring Navies, such that when they place an order, it's fairly well-read that the adjacent Navies will also follow suit and they will adopt the same level of equipment. And that's exactly what we are seeing today. So I think, as Amri said, we're delivering out the first of those systems to that Navy. The will, I'm sure, be invites of the other neighboring navies to that training event that I'll be conducting. And then Q324 is when we really understand how that progression moves forward.

Yes, and just to add there, the key benchmark for us in 2026 is to secure meaningful adoption of David outside of the U.S. That is our key benchmark. We feel in terms of the product, its acceptance on the U.S. side, we take that as a given. As Blair says, we've got very good relationship. The customer is very excited about the technology. I think the team did a great job with really understanding the requirements of the Navy, the feedback, delivering the 16 systems based on feedback. And I feel all of that is settled. In addition to that, also last year, what we saw, we saw real momentum on broadening the scope of the DAV technology, actually. So we had funding from several programs where they want to integrate the David in their infrastructure as a critical tool for their application. So we feel the David technology is really now mature and really all the development that we've been talking about, we feel, you know, we've invested in that. That's behind us. And now we are really focused this year on adoption outside of the U.S., and that's what we are focused on. And in terms of your question was quantities, I'm really – that's pure conjecture. I really can't see what quantities, but what I really want to emphasize, last year we did 3.7 million in David. Our internal business plan assumes that we will beat this number. And one caveat I want to say is that David's revenue will be lumpy for a number of reasons. We're waiting for the annual process. We expect our European customers, it's the third and fourth quarter before really any form of procurement will take place. And so I think that that's really where I'll leave it on David and its trajectory. Thanks.

Thanks. Thanks. And then last question is for the next generation at Ecosilk, could you give us an update on what customer feedback is like?

Blair, did you want to take that? Yes.

Yes, I can take that one. Thank you very much for that question. Yeah, I think we are exceptionally excited to launch our nanogen series. It really is a game changer for us in terms of really how wide a program we can actually fit our technology on. And I think that has been incredibly swiftly noticed by both the defense and oil and gas and other markets around the nanotechnology. I feel very much so that we have really strong interest from a lot of those programs, and especially in the Navy side, where we're already seeing considerable interest for existing funded programs. So they would typically execute what we would call a PIP or a Product or Platform Improvement Program, and that really is a formal engineering and funding pathway for upgrading already fielded systems, so either adding new capability, addressing, say, system deficiencies, improving reliability, and inserting new technology into existing platforms. So, the interest to date from the committee has been largely focused on the capability growth enabled by Nano. So, we're adding brand new capability to those existing platforms. But the introduction of Nano does actually address multiple of those justification categories. So, as a result, I see that the opportunities are much closer to program execution. They're having lower acquisition risks. And they're definitely much more shorter term with a predictable volume profile. In other words, we can integrate onto existing platforms that are in the field. And this isn't waiting on perhaps a new funding program for an entire new vehicle. And that said, we are also being approached by multiple defense companies for integration of the nanotechnology at a ground up level, which is also very exciting. But we understand that those programs have got a longer gestation period, so we're very much, again, laser focused on the PIP approach where we can integrate our technology onto already well-established programs and products. And I do see also that we will have closer and closer relationships with some of those people involved in those programs as we integrate the nano into that program. But really, it's taking the existing, well-proven, for 20-odd years, our 3D real-time volumetrics, you know, which we still really stand, you know, almost alone in that capability, and bringing that to these new AI and enabled, you know, vehicles, be they autonomous, semi-autonomous, or manned platforms. And, you know, we're really excited to see the growth on that.

Great. Thanks for taking our questions.

Thank you.

Thank you.

Thank you. And as a reminder, if anyone has any questions, you may press star 1 on your telephone keypad to join the queue. Our next question comes from the line of Nick Walto, a private investor. Please proceed with your question.

Hey, thanks for taking my question. I just had a quick one and a quick follow-up. So as you look into calendar 2026, how would you characterize the offshore commercial demand environment? Do you see it improving out of 2025? And what indicators do you look for?

Well, look, you know, the commercial market is really our commercial marine market. We're well established and it's less a fight about what the technology can and can't do. So I think year on year out, we see good opportunities for the ecoscope within the commercial market. I think what the rental side has been really sort of slow, but Q4, we saw quite an uptick in rentals. And rentals are important for the business insofar as they are the big offshore companies who don't really buy equipment but run these very long projects where you can have multiple ecoscopes and engineering services on those programs. So they're really, really important to us. For the first three quarters, the rental side was down, but in the fourth quarter, we saw a significant uptick in rental opportunities and rental sales. So looking out for us, the important part for our revenue growth is the defense market. It's always, and the reason for that is because the defense market has opportunities for multiple sales and long-term revenue. So that's pretty much really where our effort is as a business to grow. And Blair talked very much about we've got a number of programs where the Ecoscope is contender for being embedded into those programs that will yield this long-tail recurring revenue that we talk about, but also excitingly for us, we have broken into some near-term catalysts on these PIP programs. So I feel really for us, for the business to really grow, it is the defense market that really we are allocating most of our resources and business development effort. because, as I said, in the commercial markets there, we're well-established. You know, we've been in this game for, you know, over 30 years. We're well-known. It's a small community. But the side that we really have to grow is the defense space. And I'm also very pleased with our core business revenue structure this fiscal year because the previous fiscal year we did around 40% in the defense space. This year, we did 46%. So I feel we're making progress, and that's what we have to do to see significant growth for our business. And these PIP programs that are near-term catalysts, particularly with a focus on nano, is really, really where we're spending a lot of our time this year.

Thank you. And then looking forward, now that you have $28 million in cash on hand, a pretty hefty amount, how do you think about capital allocation priorities going from here?

Thanks. well as i said actually in my closing remark um recognizing we do have quite a lot of cash we feel the best way to give returns to investors and also to grow the business is by through a creative value-added acquisitions so we're really actively seeking to um complete an acquisition this year. We're still looking at targets. But, of course, we really want to make sure we make the right decision for the group, so we're putting a lot of work into screening what makes sense for our business.

Thank you.

You're welcome.

Thank you.

And at this time, this concludes our question and answer session. I'd now like to turn the call back over to Anne-Marie Gatto.

Thank you, Operator. Thank you for attending today's earnings call. Have a great day. Thank you, everyone.

Thank you for joining us today for a quota octopus conference call. You may now disconnect.