Coda Octopus Group Inc. Q2 2023 Earnings Call
Good morning, and welcome to coda Octopus groups second quarter fiscal year 2023 earnings conference call.
My name is Christine and I'll be your operator for today.
Before this call coda octopus issued its financial results for the fiscal second quarter ended April 30th 2023, including a press release, a copy of which will be furnished any 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, Art's place or its chair and CEO and Murray Gill and it's acting CFO Mrs. Gil Jarden.
Following their remarks, we will open the call for questions.
Before we begin Jackie caching or from the Gateway group will make a brief introductory statement.
Mr. <unk>. Please proceed.
Thank you good morning, everyone and welcome to Coda Octopussy second quarter fiscal year 2023 earnings conference call.
Before management begins their formal remarks, he would like to remind everyone that some statements. We're making today may be considered forward looking statements under securities laws 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.
Or are you to our filings with the Securities and Exchange Commission for a 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 Form 10-Q for the second quarter. He.
He may get Codell Octopus, the Securities and Exchange Commission filings free by visiting the SEC website at Www Dot SEC Dot 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, a coda octopus, whose web site.
Now I will turn the call over to the company's chairman and CEO and Murray Gill Emory.
Thanks, Jackie and good morning, everyone. Thank you for joining us for our second quarter 2023 earnings call.
Asset management, we have established over many years, a good track record of running a profitable and challenged businesses we.
We have also spent the last four years on the development of our new generation of underwater products into solution, including our <unk> pipe and our guide for augmented fishing, it's nice to see.
Sabic.
Which underpin our growth strategy.
Management's core focus is now on organically growing the business.
Our current business target is growing the marine technology business. This year by 22, 2% to reach $18 million.
And growing the services business by six 7% to reach $8 million.
We have a strong balance sheet and do not envisage the requirement for new capital to fund our growth.
Although at the anchors this quarter, we are behind on our full year 2023 business plan financial goals, we continue to be laser focused on our growth strategy.
And executing against this.
Some episcope rental and sales projects, we are working on half on predictably slowed mainly in Asia and therefore in the second quarter, we did not achieve our revenue target for it because coke solution.
Yeah.
I'd now like to summarize our second quarter highlights.
Within our current business strategy of two pillars of growth for our company or our Echo Scoop real time, three D imaging sonar, but new generation of Echo Scoop pipe.
Our recently launched diaper augmented fishing displaces theme, David it's Jim.
Which is in adoption by the U S Navy.
I will therefore focus my remarks on these two pillars.
Turning firstly to the exit scoop.
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 onto the water market.
One of the key requirements for the defense market with these new vehicles. Its real time, three D spatial perception and seen awareness the technology.
It is therefore, our strategy to work on increasing the number of different underwater vehicle programs, which the after school technology is embedded in.
If we're successful with our strategy. This would open up long tail and recurring revenues for the business on these programs.
Similar to the business model of our engineering business.
In the second quarter Episcope sales were down and this is largely due to anticipated sales in Asia territory.
It did not come through in the second quarter as expected.
We however continue to focus on our overriding strategy to increase our market share of the imaging sonar market.
In this quarter, we provided support to two of the defense programs that utilize our ex escaped.
These programs are now entering their customer trial phase.
Turning to debate.
The Capex tablet system has now moved from the Navy's R&D fees to their field adoption phase and in the second quarter, we sold $1 million Dabic systems.
Which will be distributed to new come on within the Navy.
Yeah.
Within our 2023 financial year fiscal projections, we have $2 million revenue targeted for debate dust.
Thus in the second quarter, we have achieved a 50% of our targeted revenues for this product.
And with the opportunities. We are currently pursuing we believe we will meet our 'twenty 'twenty me fiscal year target for the topic.
We continue to pay for it from an R&D focus the sales and marketing and brand building.
The second quarter saw us having top quality engagements. Some of these were closed door invitation only event with our target market and we continue to raise awareness about our technology.
We participated in several events for the promotion of our products and services, including two key events, which whereby in vacation.
Especially <unk>.
Corporation courses week, 2023, which was hosted in partnership with United States Special operations Command.
And military diaper training continuum in Panama City, which had in excess of 250 military diapers participating a significant target market for the on purpose.
<unk> of tablet.
We also showcased and presented the Dabic purport solutions at the Dutch diving regulatory body slaughter special weapons ordinance device exchange event in person tree, Netherlands, which had a large turnout of diving.
Companies.
Fire Department and the defense neighbor Inspectorate in attendance.
We had successful demonstration of DAP it to the Dutch Navy in a vessel rescue penetration training facility in the Netherlands.
We also had successful completion.
Savi trials with a major European offshore provider, who is actively discussing options for adoption.
We also had successful engagement.
And demonstration of debit to new market opportunities for the deep saturation diving sector and multiple nation special forces on type of diving solutions.
We successfully supported two different defense onto water vehicle programs.
Prime defense contractors with their echo Scoop type integration in preparation for their ongoing sea trials with their end user customers.
In the quarter. We also saw strong inquiries for rental of the DAP. It solution for projects that had hinted by low visibility water condition.
In the second quarter, therefore, we have solid momentum and progress around our key pillars of growth.
The topic and ACA scoop pipe.
Looking for what we are also discuss discussing potential adoption by a chat to beach construction company.
Seems off get valuation system for the data on type of solution and working with U S project sponsor for the full adoption of the debate on tablet system in 'twenty 'twenty four.
Turning to the debate adoption curves.
Debit is an important part of our growth strategy and we think it is important to update the market on the likely adoption curve for this recently launched technology.
The customer adoption curve for nearly all of such opportunities is the same.
Page one initial demonstration in trials to establish interests.
Stage two customers specific trials, which are designed around their workflow typically on light operational mission and stage three decision on adoption and investment plan.
This process can take up to two years to culminate in a decision.
To summarize where we are with some of these initiatives around the topic. Therefore, turning firstly to Dabic tepid fare and debit tepid Varian is an approved navy use item and it's now in the field and adopted by the U S.
B.
Yeah.
The Navy has started purchasing field assistance.
As distinct from R&D systems.
In this second quarter, we sold $1 million DAP It tepid systems.
We're now actively marketing this variance in both the commercial and defense sectors.
Including extending our model to lease and rental options.
Turning to DAP it on type of variance.
But DAP it on tepid Varian is now deliberate and under evaluation with project sponsors and we expect some initial evaluation system to be purchased for broader field assessment in the third quarter.
This variance was the centerpiece of the special operation forces and military military diaper training continuum. It then we attended in the quarter.
Coda Octopus will continue to support the field evaluation by providing training.
And all the technical support that may be required by the project sponsor.
Interest has grown and adapted in new diving communities and we are working with teams in the saturation diving community boost the U S Navy and commercial European dive contractors.
Turning now to ongoing trials and adoption discussions.
We have four second stage of flooring Defense agency trials scheduled in our third and fourth quarters.
One European offshore service provider in third stage.
And discussing investment plans.
One European offshore surface provider in second speech.
And we have already done Dabic customization work on the technology.
This service provider.
We are actively discuss discussing adoption options with one major Japanese offshore construction company, who isn't it's an established user of our scoop and who owns up to 15 exit scoops within their operation.
Due to their established use of our Eco school technology. We believe the adoption process is likely to be much quicker and we have provided commercial terms on the adoption to discuss them.
Turning to expansion of the business model for debit technology, allowing market access.
We also believe from recent business development efforts that we could fast track adoption through rental and lease off the tablet technology.
This will also broaden the accessibility of the technology in the marketplace.
We continue to believe that the likely inflection point for the Javad. Therefore is in financial year 'twenty 'twenty four.
We hope to have acquisition budget line established with other customers outside of the U S Navy and to where the U S. Military commands had started purchasing debate on tepid system.
Biggest opportunity for the product following completion of their evaluation period.
To conclude therefore, we remain comfortable targeting approximately 25 million in revenue for our technology business on a standalone basis in financial year 'twenty 'twenty four.
In financial year 2022 this business that is the marine technology business had revenue of approximately $15 million and this year, we're targeting $18 million for this business on a standalone basis and at the same time.
Maintaining our profitability.
Turning now to new products and all the progress.
A number of key technologies were developed as part of the damage system, including the digital audio communication modules and the subsea edge enhanced video modules.
The first of these have already been requested as a standalone product by the U S. Navy and we have a purchase order to deliver the first.
Small batch.
Third quarter.
We're also in discussions with several vehicle manufacturers or the integration of our subsea edge and Hahn video modules.
These technologies allow us to expand our product portfolio through discrete packaging already developed technology.
First the AD and diversify our market reach and revenue.
This product is also exciting for the company as the purchase process, it's significantly shorter due to the price point of these molecules.
We also believe that there is a real need to advance onto water communication systems by moving from analog communications to digital communications, which is what this new digital audio communications module is designed for.
The addressable market for this we believe is significant.
If our product meets the addressable market brief.
Yeah.
Now turning to our engineering business.
We continue to reiterate that this segment is important for our group as it has strong pedigree in defence engineering, which tell or relationships with prime defense contractors spanning decades. These.
These are important relationships for our group strategy.
There is a strong crossover of engineering skills, which is vital for us to maintain our competitive lead in real time, three D imaging sonar and our diabetes technology.
This business that is the marine engineering business.
Size of sub assemblies into broader mission critical programs on the sub contracts with Prime defense contractors.
This gives them the opportunity to have repeat orders to be sub assemblies for the life of the program.
Within this business segment, we are navigating headwinds from supply chain issues across various defense programs.
The supply chain difficulties apply not only to our own sourcing of components, but also crucially to our customers' own supply chain issues in parts of the program unrelated to us.
This is resulting in the broader program design requirements being slower to lock in due to the general on availability of components.
This has led to many instances of multiple iterations of the design proposals being submitted.
The same work package, which in turn has resulted in lower order T O.
Order intake in our first and second quarters.
Yeah.
However, we have two new programs, which are now moving from their prototype CS into production phase, where we expect to receive purchase orders for the manufacturing of fees or sub assemblies.
We have substantially completed the environmental assessment tests.
One of these programs recently and we expect to receive the manufacturing order for beef in the financial year.
Have also started to deliver the first of our small batch of star, Mike, Michigan computers to a NATO country.
This will cumulatively positively impact this business and it's an important first step in restoring the surfaces business to its $10 million revenue profile over the next two years.
Let me now turn the call over to our acting CFO THR Dean to walk you through our financials before I provide my closing remarks.
Dale.
Thank you Anne Marie and good morning, everyone. Let me take you through our fiscal second quarter financial results later.
Let's begin with revenue.
In the second quarter of 'twenty two 'twenty three we recorded total revenues of $5 $3 million compared to $5 million in the second quarter last year, an increase of six 4%.
Moving technology business generated revenues of $3.6 million.
<unk> to $3 $5 million last year second quarter of two 6% increase.
We are excited about the mix of sales and as previously mentioned, but maybe in the second quarter, we sold $1 million of stuff that genius, which is 50% of addressing your target for this financial year.
Looking now at gross profit and margin.
In the second quarter of 'twenty to 'twenty, three we generated gross profit of $3 $6 million.
Compared to $3 million in the second quarter of fiscal 'twenty to 'twenty two.
Gross margin in the second quarter of 'twenty to 'twenty, three with six to eight 3%, especially 68% in the same vehicles period.
In our marine technology business a protest.
Business gross margin fell slightly to 75, 3% in the second quarter at between <unk> 23, compared.
Compared to 76, 6% in the prior year second quarter, reflecting changes in the mix of sales.
In the second quarter. This year, we had more units of hardware in the mix of sales with less units are rentals and services.
Our Marine Engineering business gross margin was 56, 9% versus 23, 9% in the prior year second quarter.
And the pay of P. D. If there was a high concentration of revenues from a particular low margin project.
Now moving to operating expenses.
Total operating expenses for the second quarter of 'twenty between T. Three increased eight 5% to $2 $8 million compared to $2 $6 million in the second quarter a swing between the two.
Driven by a 10, 3% increase in selling general and administrative expenses.
The increase in professional fees for services, such as tax and audit.
Yeah.
Our selling general and administrative costs in the second quarter of between 23 total $2 $2 million, increasing from $2 million in the prior year second quarter.
As a percentage of your faith in us or selling general and administrative costs for the second quarter 'twenty to 'twenty three increased to 42, 3% of total revenue compared to 48% in the second quarter fiscal 'twenty to 'twenty two.
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 resource Houston strategy from recession development to global business development from building on Investor Relations.
We believe we have developed world class products and solutions that provide market leading positions for coda.
And that we can make meaningful progress in our markets to these investments to create shareholder value.
Now focusing on pushing income, which in the second quarter of 'twenty to 'twenty, three with 855000 doors compared to $481000 in the second quarter of 'twenty to 'twenty two.
Operating margin was 16, 1% compared to nine 7% in the second quarter last year.
Net income before taxes in the second quarter of 2023 was $1 million compared to $493000 in the second quarter of 2022.
Net income after taxes in our second quarter Tweens between T. C was $1 million or nine cents per diluted share compared to 600, and I listened to $1.05 per diluted share in the same quarter last year.
Finally, looking at our balance sheet.
April 15th two into 'twenty, three we had $23.5 million in cash and cash equivalents on hand, a new date.
This represents a $1 1 million.
Cash decreased in the quarter due to the timing of our federal tax and state tax payments for the prior year as where it was pre payments for tax in this year was twofold, one point to $7 million.
This tax payment is also reflected in a $1 million reduction in their current liabilities.
So they used to be we have let the cash build.
Half a million dollars.
That completes my financial summary, now I will turn the call back over to Henri for closing remarks.
Murray.
Thank you Gail.
As stated previously although in the second quarter were behind in our business plan. We are focused on executing our existing plan and growth strategy.
We have significant momentum around our growth pillars and again also.
Lucas is converting these into tangible near term opportunities for the business.
Management will continue efforts to explore the rental and lease model for the DAP it with our objectives of galvanizing market adoption.
We also have a near term growth catalysts from the digital audio communications module.
If were successful with this module it will provide the company with diversification of revenue, which counterbalances the longer sales cycle or boost the echo scoops and the DAP it and potentially add some good stream of additional revenues for the company.
We have a demonstrated track record of consistent profitability and we have a solid on leverage balance sheet with cash on hand, and no debt, which gives us confidence in our outlook for cuda.
Furthermore, with our solid balance sheet, we do not envisage needing gross capital for the growth targets, we've set out for the next two years.
We're now happy to take your questions operator.
Yes.
Thank you.
We'll now be conducting a question and answer session.
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Participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
One moment, please while we poll for questions.
Thank you. Our first question comes from the line of Bryan Keane Flicker with Alliance Global Partners. Please proceed with your question.
Great. Thanks, so much and thank you for all.
A very detailed information in your markets in Europe , and and exciting things going on I wanted to start with your financial targets for fiscal 'twenty three.
Especially the $18 million for marine products.
It's really more of a substantial increase in demand for the second half of the year, especially with only a modest contribution if I heard you right.
There's about $1 million more to the that Joe first have you seen an improvement in the Asian market and then.
Whether you have or have not what what does give you the confidence in the second half of the year, you're going to see much stronger results compared to the first half.
Okay.
Brian Hi, Henri Thank you very much for that question, Yes, you know, where we're really off time and as I said and I'm really by this time, we really should've done around $9 million and that's largely what we've seen really good.
Inquiries could level off propulsion writings and good quality of opportunities that.
We are pursuing.
However, what we've really seen is the slower pace of conversion from the Asian market, but nothing that leads us to believe that the opportunities have gone away, we still think that they're valid opportunities for 2023.
So whilst I've been.
We are definitely off time, and we've got a lot of work to do to achieve that $18 million.
I really think from what I am seeing for our business is that we still could be very close to the protections. The internal projections look we haven't repo cockpit. Because then we have no reason to do so.
As I said, what we're seeing is.
Lower piece of conversion, but nothing indicating that the opportunities that we are.
Pursuing have gone away, it just slowed and and and that's you know not.
Not unusual I mean, our sales cycle and quarterly fees are not necessarily linear although within our projections. They are just for modeling purposes linear, but really our focus is full year.
Revenues and on a full year basis, we have no reason at this stage to re forecast that.
Okay, and then as it relates to two underwater vehicles in trials with the echo scope pipe coating.
<unk> technology, the only ones selected for those trial phases, and how long do you expect a trial phase might last.
Well, we don't know what's on the defense vehicles that are being bought on a census, or there. We only know that our sensor is part of that solution and I think that the two programs that we.
Worked on this quarter I think that they are at their advanced stage and from information we have.
This proved or more trials are successful, they're likely to do a small batch in the beginning of Q1 next year, but its subject of course to their trials being successful and they continue to execute at the pace that they are currently executing.
Right now last quarter, you talked about having four of these.
Underwater vehicles in the U S and went outside the U S. Maybe share any details you've commented on to the other three have been gone away are they still in the pipeline. There just no update on that I'm, just trying to understand how that pipeline may or may not occur.
No.
No no. The pipeline is the pipeline is the same one program is in Japan, and a full program in the U S. In fact, one program is a commercial opportunity they have launched their new program and I think that.
We are selling into that program. So I think they have done successful trials with their underwater vehicle and I think that they're in the process of.
Fix would be for them the rental model a model to I think that program is alive or technology as part of their solution and the other programs are ongoing but in this quarter I think what I tried or the business is trying to emphasize is that the programs that we see.
Portrait are advancing and moving from just your development fees into customer tries seats and we're excited about that because it's a significant move forward onto the program.
Got it. Thank you and then my last question for now is.
In the past you've communicated recent past you've communicated.
Your plan to invest more in sales and marketing.
<unk> moved up a little bit, but not a material amount at least in my opinion.
You talk about where you are with that piece of the plan and what you have left if you have something to invest in sales and marketing.
Yeah. So we've been doing a lot of of legwork in the territories that are important to us. So Europe is really really important Asia is really important and the U S market. So let's start with Asia really what we are doing in Asia is expanding.
Our network of agents.
And really what the business needs to do is to put boots on the ground to support agents and support our customers. There. So the investments we're making for marketing is supporting our agents in the field with.
Support.
Staff in country and that's the model that we think will be very effective for our customers there because what our customers want to know, especially with these programs that we're working on especially for the DAP. It that Theres a code of conduct can provide support in country, So where.
In the process of moving support engineers into Japan to start with and China and South Korea. So that's the first leg of course as I've mentioned, expanding our agent network, which means that are pointing more agents and we have done that in the last since this year, we've appointed a new.
Number of new agents and provided training in fact in June we have quite a big team going out to China to do not just demonstrations, but extensive trading under our senior hydrographic survey will be there for several weeks, providing support and training to our.
Agent. So we think that the best way for the countries, where you know we don't speak the language the best way to support our customers like expanding our agent network and ensure that our agents are trades.
In country support for the opportunities that are ongoing and also when a customer has a problem on the ground that you know who the people are at 10 to see this is what you need to do or the system needs to go back to be but we feel that this is the best motor for us. So that's that in the U S.
Continue to.
To attend a lot of significant events and you know we are although our marketing costs were down I think that on a full year basis. It's just timing, we will see marketing being much higher than last year, because we've got quite a lot of activities planned for the back end of the year.
Air and in the U S. We're still looking to recruit.
Lucas.
This development.
Staff and that's ongoing and similarly in Europe , we are looking for people, but they've got to be the right people with the right background.
You know I'm pleased to see that we're expanding our agent network at the same time and providing quite a lot of support and training people and growing opportunities.
Right I would ask about that but you provided so much good detail of it I don't really have any questions about it. So thanks for all you're doing.
Thank you very much Brian Thank you.
As a reminder, if you would like to ask a question press star one on your telephone keypad.
Our next question comes from the line of Walter Ramsey with R. Squared. Please proceed with your question.
Hello, and thanks for all the information.
Request I guess, if you could elaborate a little further on the slow.
Performance in Asia, You know you said the.
Customers are dragging their feet a little bit goes up because of their own business is slowing down or you know what what what's provoking up.
Well, we don't have a lot of visit.
Visibility as to the reason for the slow pace of conversion.
Yeah, what we're told that project is just move a little bit to the right. It's not going away. So you know we don't have any reason to be concerned Caribbean. Good line of communications with our agent network with the opportunities that we're pursuing and what we're told is that they've just moved.
Move to the right so.
I can't give you more color as to the reason, but what I can see is that at this point I am not alarmed because I believe it's just a question that the project is pushed out.
A little bit from escaping Q2, two later on in the year.
Okay, and as far as the Echo scopes in the military.
I mean, my understanding is that the military.
Around the world as you know really accelerating developmental things underwater.
Drones essentially is that the case or are they you know kind of.
Not moving as quickly as you would like either.
Well you know look at the programs that we are really targeting for getting our vehicles embedded in there's a lot of front end work because then if.
If you think of a vehicle being manufactured to the.
The end user requirement.
You know that will take a couple of years the work that cuda octopus needs to do is to be part of that front, it's a little bit like Tesla if kathleen is to bring out a new model of vehicles.
Older specification for that model is locked down and where that vehicle is been produced and supplied to the market. It's the same specification for that model. That's what we are doing so the program might take a couple of years, but really that is simply what happens when you've.
Got new generation of anything Theres a prototype seat then there's trials ceased in dairy production fees. We are doing a lot of prototype or front end work to ensure we are off of that solution and this is what gives us the confidence that in the future that we are getting.
To capture more market share because we're certainly.
You know in a number of programs and it doesn't stop with the five programs that we talked about last year. Every year. This is our laser focus what are the new programs that cooled off with technology can.
It does get into and we're having lots of disk.
Discussions in fact, one of the things.
Back we had in the U S last year and that now is now being launched to the market and as I said, we have sold a handful of system last year that same program has come back to us for a different for different programs that they're now developing for a different.
Sonar within our series of sonar. So we're getting good repeat opportunities from first of all we're doing that fronts and four were part of that solution that solution works for them they come back to Codell with our good and excellent track record and.
Then we get onto another program. So I feel we're doing a lot of the right things.
And really the impact of those right things, which are the front end work that we're doing to be part of that story, where we will start yielding the results water.
Next year and onwards, so that's really what we need to do you know.
Okay.
The time that sounds correct, Okay, and then just one last question.
New military programs in particular.
When they do a bake off on a new program, what's your success rate doing them all well.
When we do a bake off what do you mean I'm not sure I understand well they put out a request for bid or whatever it is to yes, you don't get an underwater vision system for their new secret drone.
And so you.
Put it in your.
Proposal two other companies put in proposals somebody who.
I have a competition and what's your success rate.
Well, what I don't know it because the way it works, it's like a handful of I mean, most of our companies that are doing or producing underwater vehicles.
Market would be your prime defense contractors in the U S in Japan in South Korea, and really they really have a requirement already that says.
Where we win is because they're looking for real time, three D imaging sonar technology and one program know open the call with a solution and we're contracted and also where we were at the military continuum in Panama City. It was a huge swell around.
Not just the diabetes theme, but the code of ethics scope. So there there's a lot of word of mouth that this is the only imaging sonar that we'll meet that brief for.
You know imaging in real time, three D zero visibility water conditions in fact yesterday I saw a paper that was or the code octopus technology around it that people whats unequivocal that this is the most advanced sonar technology in the market and the most.
Capable and we just saw that yesterday and you know so there is no. It's not controversial that our technology is the most advanced and I think that the smaller number of prime defense contractors that are ultra reaching in the space, we're kind of well known so it's not usually a complex.
Tissue for the sensor that there and integrating into their vehicles. It's usually starts with a dialogue that theyre trying to do this within all the details that you can provide and then we answer a series of questions and then we provide them with data sheets and it goes on to their reached a point where they see okay.
We would like to buy a 16 four rfps first fees. So you know we.
We feel very.
Good connections with the primes and that's not just in the U S in Japan, and South Korea, where for example on a number of programs in South Korea Alright.
Already and that we've started supplying via so north into their new vessels.
It's our smallest community of users for real time, three D imaging and unfortunately, I mean, unfortunately, rather cuda is the show in town.
Sure.
That's great. Thanks for answering all those questions congratulations.
No. Thank you very much water.
[laughter].
Our next question comes from the line of David Wright with Henry Investment Trust. Please proceed with your question.
Good morning, Thanks for having the call.
Question can you can you tell us the status of the search for a permanent CFO and whether or not you have a particular geography in mind for this year for would be stations.
That's it thank you very much David for your question, Yes, that's ongoing we've had a number of.
Well the position is open roof in Edinburgh and in Orlando.
And so we're having some good quality conversations at the movement and.
And we're choosing to make an appointment.
You know in the next more number of months.
So that's where we are but we were getting some good quality conversations and you know, we're hoping as I said before to make an appointment in a small number of months, but of course, we want to emphasize we want to make sure. It's the right candidate for crude octopus.
Okay.
Just to.
To go back into the script I wanted to make sure I didn't I didn't misunderstand you. When you were speaking right after describing the tablet adoption curve.
Going through your.
Got to Untether and talked about what was going on with them to others and then I thought I heard you referred to something called the saturation diving community.
Did I understand the word saturation correctly.
Yes, you did exactly those are new communities that are coming out of the the squad that fat we the squad event.
Attended in tackling Trey in the Netherlands, and also the Ministry continuum.
U S. We started conversations with different teams, including the deep diving saturation team. So these are new conversations that we've started and for around the topic.
Okay. If you if you have another minute could you just kind of briefly describe.
As saturation diving.
Well I, probably it's just deeper diving, where you dive in like a chamber environment. So it's.
It just means rights at the movement, we're doing more.
More on surface typing and can be sometimes dive a little deeper at the die itself, but the saturation diving is much deeper diving and that's where you would have things like the diabetes suits and that's really where the technology would be embedded in the diving suit.
Okay.
Thanks, Tim.
Deeper diving.
Right.
I wasn't sure if it meant a lot.
And lots of divers saturating and area no. So thanks.
No excellent.
Very good well continue the good luck going forward.
Thank you very much. Thank you David Thank you.
Thank you we have reached the end of the question and answer session. Ms. Gail I would now like to turn the floor back over to you.
Ms Gail I would like to turn the floor back over to you.
Thank you for joining our call today and for your interest in our company have a great rest of your day.
D.
Yeah.
Well. Thank you for joining us. Thank you for joining us for today's coda occupancy conference call. You may now disconnect your lines.
Thank you.
No.
Yeah.