Q4 2024 Ocean Power Technologies Inc Earnings Call

Operator: Good morning, and welcome to the Ocean Power Technologies fourth quarter and full fiscal year 2024 earnings conference call. A webcast of this call is also available and can be accessed by a link on the company's website at www.oceanpowertechnologies.com. This conference call is being recorded and will be available for replay shortly after its completion. On the call today are Dr. Philipp Stratmann, President and Chief Executive Officer, and Bob Powers, Senior Vice President and Chief Financial Officer. Following the prepared remarks, there will be a question and answer session. Now, I am pleased to introduce Bob Powers.

Good morning, and welcome to the Ocean power technologies fourth quarter and full fiscal year 2024 earnings conference call. A webcast of this call is also available and can be accessed by a linked on the Companys website at Www Dot Ocean power technologies Dotcom.

Operator: Good morning and welcome to the Ocean Power Technologies Fourth Quarter in Full Fiscal Year 2024 earnings conference call. A webcast of this call is also available and can be accessed by a link on the company's website at www.oceanpowertechnologies.com. This conference call is being recorded and will be available for replay shortly after its completion.

This conference call is being recorded and will be available for replay shortly after its completion.

Operator: On the call today are Dr. Philip Stratmann, President and Chief Executive Officer, and Bob Powers, Senior Vice President and Chief Financial Officer. Following the prepared remarks, there will be a question-and-answer session.

Speaker Change: On the call today are a doctor Philip Stratman, President and Chief Executive Officer, and Bob Powers, Senior Vice President and Chief Financial Officer.

Speaker Change: Following the prepared remarks, there will be a question and answer session now I am pleased to introduce Bob powers.

Bob Powers: Now I am pleased to introduce Bob Powers. Thank you and good morning. After the market closed yesterday, we issued our earnings press release and filed our annual report on Form 10-K for the period and the April 30th, 2024. Our public filings are available on the SEC website and within the Investor Relations section of the OPT website.

Robert Patrick Powers: Thank you and good morning.

Robert Patrick Powers: Thank you and good morning. After the market closed yesterday, we issued our earnings press release and filed our annual report on Form 10-K for the period ending April 30, 2024. Our public filings are available on the SEC website and within the Investor Relations section of the OPT website. During this call, we will make forward-looking statements that are within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may include financial projections or other statements of the company's plans, objectives, expectations, or intentions.

Speaker Change: After the market closed yesterday, we issued our earnings press release and filed our annual report on Form 10-K for the period ended April 32024.

Speaker Change: Our public filings are available on the SEC website within the Investor Relations section of the O P T website.

Bob Powers: During this call, we will make forward-looking statements that are within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may include financial projections or other statements of the company's plans, objectives, expectations, or intentions. These statements are based on assumptions made by management regarding future circumstances over which the company may have little or no control and involve risks, uncertainties, and other factors that may cause actual results to be materially different from any future results expressed or implied by such poor and significant statements. Additional information about these risks and uncertainties can be found in the company's Form 10-K and subsequent filings with the SEC.

Speaker Change: During this call we will make forward looking statements that are within the safe Harbor provisions of the private Securities Litigation Reform Act of 1995.

Robert Patrick Powers: These statements are based on assumptions made by management regarding future circumstances over which the company may have little or no control and involve risks, uncertainties, and other factors that may cause actual results to be materially different from any future results expressed or implied by such forward-looking statements. Additional information about these risks and uncertainties can be found in the company's Form 10-K and subsequent filings with the SEC. The company disclaims any obligation or intention to update the forward-looking statements made in this call.

Speaker Change: Forward looking statements may include financial projections or other statements of the company's plans objectives expectations or intentions.

Speaker Change: These statements are based on assumptions made by management regarding future circumstances over which the company may have little or no control and involve risks uncertainties and other factors that may cause actual results to be materially different from any future results expressed or implied by such forward looking statements.

Additional information about these risks and uncertainties can be found in the company's Form 10-K, and subsequent filings with the SEC.

Bob Powers: The company disclaims any obligation or intention to update the forward-looking statements made on this call.

Speaker Change: Company disclaims any obligation or intention to update the forward looking statements made on this call.

Bob Powers: Finally, we posted an updated investor presentation on our IR website. Please take a moment to review it as it provides a nice overview of our company and strategy.

Robert Patrick Powers: Finally, we posted an updated investor presentation on our IR website. Please take a moment to review it as it provides a nice overview of our company and strategy. Now, I am pleased to introduce Dr. Philipp Stratmann.

Speaker Change: Finally, we posted an updated investor presentation on our IR website.

Speaker Change: Please take a moment to review it as it provides a nice overview of our company and strategy.

Philipp Stratmann: Now I am pleased to introduce Dr. Philip Strattman. Thank you, Bob. Good morning. We appreciate you joining us. Fiscal 2024 was a great year and a significant step towards positive cash flow in calendar year 2025 for our company. This year saw substantially complete the research and development stage in our journey to profitability and build upon the significant increases in revenue, growth margin, pipeline, and backlog we achieved during Fiscal 2023. Today, our focus is on the significant developments occurring over the past year and the resulting confidence they provide toward achieving further material progress in Fiscal 2025.

Philipp Stratmann: Now I am pleased to introduce Dr. Philip scrapping.

Philipp Stratmann: Thank you, Bob, and good morning. We appreciate you joining us. Fiscal 2024 was a great year and a significant step towards positive cash flow in calendar year 2025 for our company. This year saw us substantially complete the research and development stage in our journey to profitability and build upon the significant increases in revenue, gross margin, pipeline, and backlog we achieved during fiscal 2023. Today, I will focus on the significant developments occurring over the past year and the resulting confidence they provide toward achieving further material progress in fiscal 2025.

Philipp Stratmann: Thank you Bob and good morning, we appreciate you joining us.

Philipp Stratmann: Fiscal 'twenty 'twenty four was a great year and a significant step towards positive cash flow in calendar year 2025 for our company.

Speaker Change: This year, so a substantially complete the research and development stage in our journey to profitability and build upon the significant increases in revenue gross margin pipeline and backlog we achieved during fiscal 2023.

Speaker Change: Today, I will focus on the significant developments occurring over the past year, and the resulting confidence they provide toward achieving further material progress in fiscal 2025.

Philipp Stratmann: First, we had several technological breakthroughs. During Q2, we revealed a groundbreaking milestone: the successful demonstration of the WAMV, attaching itself remotely to a buoy and establishing a connection that will enable charging. This achievement underscores our commitment to reshaping autonomous maritime operations by leveraging renewable energy for sustainable charging solutions and paves the way for a future where autonomous vessels can operate for extended durations, opening doors to various applications within the maritime domain. We also recently announced we are approaching 15 megawatt hours of renewable energy production from our family of powerboos. The recent launch of our next-generation PB off the coast of New Jersey has materially accelerated average energy production by combining solar, wind, and wave energy production capabilities.

Philipp Stratmann: First, we had several technological breaks. During Q2, we revealed a groundbreaking milestone, the successful demonstration of the WAM-V attaching itself remotely to a buoy and establishing a connection that will enable charging. This achievement underscores our commitment to reshaping autonomous maritime operations by leveraging renewable energy for sustainable charging solutions and paves the way for a future where autonomous vessels can operate for extended durations, opening doors to various applications within the maritime domain

Speaker Change: First we had several technological breakthroughs during Q2, we reveal the groundbreaking milestone the successful demonstration of the Wham V attaching itself remotely to Adobe and establishing a connection that will enable charging.

Speaker Change: They said achievement underscores our commitment to reshaping autonomous maritime operations by leveraging renewable energy for sustainable charging solution and paves the way for a future where autonomous vessels can operate for extended durations opening doors to various applications within the maritime domain.

Philipp Stratmann: We also recently announced that we are approaching 15 megawatt hours of renewable energy production from our family of powerboats. The recent launch of our next generation PB off the coast of New Jersey has materially accelerated average energy production by combining solar, wind, and wave energy production capabilities.

Speaker Change: We also recently announced we are approaching 15 megawatt hours of renewable energy production from our family of power buoys.

Recent launch of our next generation P. B off the coast of New Jersey has materially accelerated average energy production by combining soda wind and wave energy production capabilities.

Philipp Stratmann: These numbers show that non-grid connected marine energy production is not just for the R&D community, but is a commercially available solution. Finally and potentially most significantly, we announced Meros, our ground-breaking artificial intelligence capable consolidated solution offering comprehensive ocean surveillance. Through Meros we're able to integrate OBT's roaming technologies such as the WAMV with resident technologies like the Powerboos to offer an unparalleled level of surveillance and data analysis capability. Meros sets OBT apart because of its ability to enhance data collection capabilities and provide artificial intelligence-capable solutions. With the launch of Meros, we're not just introducing an overarching solution offering, but a pivotal shift in how we view and protect our oceans.

Philipp Stratmann: These numbers show that non-grid connected marine energy production is not just for the R&D community but is a commercially available solution. Finally, and potentially most significantly, we announced MEROS, our groundbreaking artificial intelligence-capable, consolidated solution offering comprehensive ocean surveillance. Through MERIS, we're able to integrate OPT's roaming technologies, such as the WAN-V, with resident technologies, like the power buoys, to offer an unparalleled level of surveillance and data analysis capability. MERS sets OPT apart because of its ability to enhance data collection capabilities and provide artificial intelligence-based solutions.

Speaker Change: These numbers show that non grid connected marine energy production is not just for the R&D community, but is it commercially available solution finally, and potentially most significantly we announced maris our groundbreaking artificial intelligence capable consolidated solution offering comprehensive ocean server.

Speaker Change: Islands.

Speaker Change: Through marriage, we're able to integrate apt's roaming technologies, such as so N V with resident technologies like the power buoys to offer an unparalleled level of surveillance and data analysis capability.

Speaker Change: <unk> sets a P T apart because of its ability to enhance data collection capabilities and.

Speaker Change: Provide artificial intelligence capable solutions.

Philipp Stratmann: With the launch of MEROS, we're not just introducing an overarching solution offering but a pivotal shift in how we view and protect our oceans. Ocean security is national security, and through MEROS, OPT is dedicated to providing the technologies and insights necessary to secure our maritime domains by safeguarding the world's oceans through advanced technology and innovation. Each of these innovations stands as a testament to OPT's dedication and leadership role in supporting the security and protection of global waterways and positions us to capitalize on the expected growth in these areas while solidifying the company's unique position as a groundbreaking systems company.

Speaker Change: With the launch of met Rice, I mean, not just introducing an over arching solution offering, but a pivotal shift in how we view and protect our oceans oceans security is national security and three memorize a P. T is dedicated to providing their technologies and insights necessary to secure our maritime domains by safeguarding the wolf.

Philipp Stratmann: In addition, we advance strategic alliances with a number of complementary industry leaders. In April 2024, we announced a strategic alliance with Red Cut Holdings, Inc., a leading aerial drone technology firm specializing in the integration of robotic hardware and software across military, government, and commercial sectors. This collaboration signifies a material step forward in enhancing maritime domain awareness capabilities for air, sea, and subsea defense and security missions. Through this relationship, OPT's Power Buoy and WAM-V platforms will be integrated with Redcat's designs, facilitating a new era of autonomous vehicle deployment.

Philipp Stratmann: Ocean security is national security, and through Meros OBT is dedicated to providing the technologies and insights necessary to secure our maritime domains by safeguarding the world's oceans through advanced technology and innovation. Each of these innovations stands as a testament to OBT's dedication and leadership role in supporting the security and protection of global waterways and positions us to capitalize on the expected growth in these areas while solidifying the company's unique position as a ground-breaking systems provider.

Speaker Change: Oceans through advanced technology and innovation.

Speaker Change: Each of these innovations stands as a testament to Apt's dedication and leadership role in supporting the security and protection of global waterways and positions us to capitalize on the expected growth in these areas, while solidifying the company's unique position as a ground breaking systems provider.

Philipp Stratmann: In addition, we advanced strategic alliances with a number of complementary industry leaders. In April 2024, we announced the strategic alliance with Rescut Holdings Inc., a leading aerial drone technology firm specializing in the integration of robotic hardware and software across military, government, and commercial sectors. This collaboration signifies a material step forward in enhancing maritime domain awareness capabilities for air, sea, and subsea defense and security missions. Through this relationship, OBT's PowerBooie and WAMV platforms will be integrated with RedCut's drones, facilitating a new era of autonomous vehicle deployment. By combining our sustainable ocean powered solutions with RedCut's advanced drone technology, we are setting a new standard for naval and border protection operations.

Speaker Change: In addition, we advanced strategic alliances with a number of complementary industry leaders in April 2024, we announced a strategic alliance with rest cut Holdings, Inc. A leading aerial drone technology firm specializing in the integration of robotic hardware and software across the military government and commercial sectors.

This collaboration signifies a material step forward and enhancing maritime domain awareness capabilities for air Sea, and subsea defense and security missions.

Speaker Change: Through this relationship Apt's power buoy, and one V platforms will be integrated with Westcott strengths, facilitating a new era of autonomous vehicle deployment by combining a sustainable ocean power solutions with the best cuts advanced drone technology, we are setting a new standard for naval and border protection operation.

Philipp Stratmann: By combining our sustainable, ocean-powered solutions with RedCat's advanced drone technology, we are setting a new standard for naval and border protection operations. Also, in April 2024, we signed a teaming agreement with a major international defense contractor to provide our Mero suite of solutions with a focus on certain geographic regions. Under the terms of the agreement, the defense contractor will have exclusive rights to provide OPT's MDAS solution within certain international geographic regions.

Speaker Change: Yes.

Philipp Stratmann: Also in April 2024, we signed a teaming agreement with a major international defense contractor to provide our merit suite of solutions, with a focus on certain geographic regions. Under the terms of the agreement, the defense contractor will have exclusive rights to provide OBT's M-LAST solution within certain international geographic regions. Leveraging OBT's cutting-edge technology alongside the international contractors' extensive expertise in defense, homeland security, and commercial programs, the collaboration should strengthen the contractors' capabilities in maritime security and surveillance. This collaboration underscores the opportunity and our commitment to enhancing maritime security globally and positions us to achieve remarkable advancements in this year.

Speaker Change: Also in April 2024, we signed a teaming agreement with a major international defense contractor to provide a suite of solutions with a focus on certain geographic regions.

Speaker Change: Under the terms of the agreement the defense contractor will have exclusive rights to provide opt's <unk> solution within certain international geographic regions.

Philipp Stratmann: Leveraging OPT's cutting-edge technology alongside the international contractor's extensive expertise in defense, homeland security, and commercial programs, the collaboration should strengthen the contractor's capabilities in maritime security and surveillance. This collaboration underscores the opportunity and our commitment to enhancing maritime security globally and positions us to achieve remarkable advancements in this field. In June 2024, we announced the signing of an Original Equipment Manufacturer Agreement with Teledyne Marine, a key supplier of maritime technology, inclusive of connectors, instruments, and vehicles.

Leveraging opt's cutting edge technology alongside the international contract has extensive expertise in defense homeland security and commercial programs. The collaboration should strengthen the contractors' capabilities in maritime security and surveillance. This collaboration underscores the opportunity and our commitment to enhancing.

Speaker Change: Maritime security globally and positions us to achieve remarkable advancements in this field.

Philipp Stratmann: In June 2024, we announced the signing of an original equipment manufacturer agreement with Teladine Marine, a key supplier in maritime technology, inclusive of connectors, instruments, and vehicles. This strategic partnership should enhance OPT's product offerings and drive innovation within the industry, providing customers with a turnkey system. Joining forces with Teladine allows us to leverage Teladine's best-in-class offerings to deliver superior sensor and ocean technology products to our customers. We believe this partnership further accelerates our growth and enables additional revenue streams. We recently partnered with UNIQ Group, a UAE-headquartered global innovator in subsea technologies and engineering to collaborate to deploy OPT's WAMVs in the UAE and other regions in the Gulf Cooperation Council region.

Speaker Change: In June 2024, we announced the signing of an original equipment manufacturing agreement with Teledyne Marine a key supply and maritime technology inclusive of connectors instruments and vehicles.

Philipp Stratmann: This strategic partnership should enhance OPT's product offerings and drive innovation within the industry, providing customers with a turnkey solution. Joining forces with Teledyne allows us to leverage Teledyne's best-in-class offerings to deliver superior sensor and ocean technology products to our customers. We believe this partnership further accelerates our growth and enables additional revenue. We recently partnered with Unique Group, a UAE-headquartered global innovator in subsea technologies and engineering, to collaborate to deploy OPT's WAMVs in the UAE and other regions in the Gulf Collaboration Council region.

Speaker Change: This strategic partnership should enhance apt's product offerings and drive innovation within the industry, providing customers with a turnkey system.

Joining forces with Teledyne allows us to leverage teledyne's best in class offerings to deliver superior sensor on ocean technology products to our customers. We believe this partnership further accelerates our growth and enables additional revenue streams.

Speaker Change: We recently partnered with unique group.

UAE headquartered global innovator in subsea technologies, and engineering to collaborate to deploy Apt's why movies in the UAE and other regions in the Gulf collaboration Council region.

Philipp Stratmann: Integrating OPT's commercially available vehicles with a unique leading position in the offshore energy industry in the UAE should accelerate the adoption of USVs in the region. Working with UNIQ Group should further accelerate our efforts to deploy USVs globally. The GCC in general and the UAE specifically are rapidly becoming a major focus area for us as we continue our growth in both the defence and security and offshore energy industries.

Philipp Stratmann: Integrating OPT's commercially available vehicles with UNIQ's leading position in the offshore energy industry in the UAE should accelerate the adoption of USVs in the region. Working with UNIQUE Group should further accelerate our efforts to deploy USVs globally. The GCC, in general, and the UAE specifically, are rapidly becoming a major focus area for us as we continue our growth in both the defense and security and offshore energy.

Speaker Change: Integrating opt's commercially available vehicles with unique leading position in the offshore energy industry in the UAE should accelerate the adoption of U S vs in the region.

Speaker Change: Working with unique group should further accelerate our efforts to deploy U S vs globally. The GCC in general on the U a E. Specifically are rapidly becoming a major focus area for us as we continue our growth in both the defense and security and offshore energy industries.

Philipp Stratmann: Back home in the USA, we signed a reseller agreement with Survey Equipment Services Inc., a specialist in the supply of marine survey and navigation equipment. The agreement focuses on the provision of OPT's WAMVs domestically. This agreement allows us to leverage SES's offering of survey and navigation equipment and deploy WAMVs to SES's customer base.

Philipp Stratmann: Back home in the USA, we signed a reseller agreement with Survey Equipment Services, a specialist in the supply of marine survey and navigation. The agreement focuses on the provision of OPTs and WAMVs domestically. This agreement allows us to leverage SES's offering of survey and navigation equipment and deploy WAMVs to SES's customers. This partnership further accelerates our growth and enables additional revenue. Most recently, we entered into a memorandum of understanding with AltaSea at the Port of Los Angeles.

Speaker Change: Back home in the U S. A we signed a reseller agreement with survey equipment services, Inc, especially in the supply of Marine survey and navigation equipment. The agreement focuses on the provision of Opt's whangee used domestically.

Speaker Change: The agreement allows us to leverage Ses's offering of survey and navigation equipment and deploy one vs to ses's customer base.

Philipp Stratmann: This partnership further accelerates our growth and enables additional revenue streams. Most recently, we entered into a memorandum of understanding with OTC at the Port of Los Angeles. The joint aim is to explore exciting opportunities within the blue economy, and partnering with OTC provides additional opportunities for staging our renewable energy power buoys and WAMV and month surface vehicles for projects in the Pacific Ocean.

Speaker Change: This partnership further accelerate our growth and enables additional revenue streams.

Speaker Change: Most recently, we entered into a memorandum of understanding with oversee the port of Los Angeles.

Philipp Stratmann: The joint aim is to explore exciting opportunities within the blue economy, and partnering with O2C provides additional opportunities for staging our renewable energy power buoys and WAM-V unmanned surface vehicles for projects in the Pacific Ocean. Lastly, we continue to work closely with various departments and agencies of the U.S. government. With many veterans in our workforce, we are proud and humbled to support our brave warfighters, be that in the areas of mine countermeasures, counter-unmanned underwater vehicle efforts, or autonomous swarming. Now, I would like to transition to another topic.

Speaker Change: The joined aim is to explore exciting opportunities within the blue economy, and partnering with Ultra C provides additional opportunities for staging a renewable energy power buoys and round V unmanned surface vehicles for projects in the Pacific Ocean.

Philipp Stratmann: Lastly, we continue to work closely with various departments and agencies of the U.S. government. With many veterans on our workforce, we are proud and humbled to support our brave war fighters, be that in the areas of mine counter measures, counter unmanned underwater vehicle efforts, or autonomous swarming.

Lastly, we continue to work closely with various departments and agencies of the U S government with many veterans on our workforce, we are proud and humbled to support all break Warfighters beat it in the areas of mine countermeasures counter unmanned underwater vehicle efforts.

Speaker Change: All of autonomous swarming.

Philipp Stratmann: Now I would like to transition to another topic. As many of you were aware, during fiscal 2024, we faced challenges from a dissident shareholder who engaged in the proxy battle and initiated three lawsuits against the OPT board and the company in an effort to seek control of the company without following appropriate governance standards and without offering fair value to the stockholders. Despite his efforts, the dissident shareholder was unsuccessful in his attempt to influence the company's strategic direction. His proposals did not gain sufficient support from other shareholders, reflecting their confidence in our current leadership and strategy.

Speaker Change: Now I would like to transition to another topic as many of you are aware during fiscal 2024, we faced challenges from a dissident shareholder who engaged in the proxy battle and initiated three law suits against the a P. T board in the company in an effort to see control of the company without following appropriate governance standards.

Philipp Stratmann: As many of you are aware, during Fiscal 2024, we faced challenges from a dissident shareholder who engaged in a proxy battle and initiated three lawsuits against the OPT board and the company in an effort to seek control of the company without following appropriate governance standards and without offering fair value to the stockholders. Despite his efforts, the dissident shareholder was unsuccessful in his attempts to influence the company's strategic direction. His proposals did not gain sufficient support from other shareholders, reflecting their confidence in our current leadership and strategy.

Philipp Stratmann: The dissident shareholder subsequently filed to dismiss one of the lawsuits he had initiated. It has become clear that he is attempting to advance his own agenda at the expense and to the detriment of the broader shareholder. His actions included disseminating misleading information and attempting to undermine the company's reputation.

Speaker Change: And without offering fair value to the stockholders. Despite his efforts the dissident shareholder was unsuccessful in its attempts to influence the company's strategic direction.

Speaker Change: He's proposals did not gain sufficient support from other shareholders, reflecting their confidence in our current leadership and strategy.

Philipp Stratmann: The dissident shareholder subsequently filed to dismiss one of the lawsuits he had initiated. It has become clear that he is attempting to advance his own agenda at the expense and to the detriment of the broader shareholder. database. His actions included disseminating misleading information and attempting to undermine the company's reputation. Addressing this situation incurs significant costs, impacting our results for fiscal 2024, which pop would detail momentarily. Moving forward, we have taken steps to strengthen our corporate governance and improve our shareholder engagement strategies to prevent similar situations in the future. Our focus remains on driving growth and delivering value to all our shareholders.

Speaker Change: Dissident shareholder subsequently filed to dismiss and one of the lawsuits. He had initiated it just became clear that he is attempting to advance his own agenda at the expense and to the detriment of the broader shareholder base his.

Speaker Change: His actions included disseminating misleading information on attempting to undermine the company's reputation.

Philipp Stratmann: Addressing this situation incurred significant costs, impacting our results for fiscal 2024, which Bob will detail momentarily. Moving forward, we have taken steps to strengthen our corporate governance and improve our shareholder engagement strategies to prevent similar situations in the future. Our focus remains on driving growth and delivering value to all our shareholders. We are committed to maintaining open and constructive communication with our investors to ensure their concerns are addressed proactively. Despite the challenges posed by the dissident shareholder, we have remained resilient and focused on our long-term goals.

Speaker Change: Addressing this situation incurred significant costs impacting our results for fiscal 2024, which Bob will detail momentarily.

Robert Patrick Powers: Moving forward, we have taken steps to strengthen our corporate governance and improve all shareholder engagement strategies to prevent similar situations in the future.

Robert Patrick Powers: Our focus remains on driving growth and delivering value to all our shareholders. We are committed to maintaining I've been unconstructive communication with our investors to ensure their concerns are addressed proactively despite the challenges posed by the dissident shareholder we have remained resilient and focused on our long term goals.

Philipp Stratmann: We are committed to maintaining open and constructive communication with our investors to ensure their concerns are addressed proactively. Despite the challenges posed by the dissident shareholder, we have remained resilient and focused on our long-term goals. We will continue to channel our resources under tension towards executing our strategic plans and capitalizing on growth opportunities. In closing, our business is performing well. As a result of the foundation and opportunities I've just described, we remain on track to achieve our previously stated goal of attaining profitability during the second half of Canada 2025. To achieve this, we have very recently implemented a set of measures that include further headcount optimization, material reductions, and third-party spend, and efforts to tightly control and contain costs.

Philipp Stratmann: We will continue to channel our resources and attention towards executing our strategic plans and capitalizing on growth opportunities. In closing, our business is performing well. As a result of the foundation and opportunities I've just described, we remain on track to achieve our previously stated goal of attaining profitability during the second half of calendar 2025. To achieve this, we have recently implemented a set of measures that include further headcount optimization, material reductions in third-party spend, and efforts to tightly control and contain corruption. These measures are fully implemented and focus particularly on non-revenue-generating engineering and GNA.

Robert Patrick Powers: We will continue to channel all resources and attention towards executing our strategic plans and capitalizing on growth opportunities.

Robert Patrick Powers: In closing our business is performing well.

Robert Patrick Powers: The result is a foundation of opportunities I've. Just described we remain on track to achieve our previously stated goal of attaining profitability. During the second half of calendar 2025 to achieve this we have very recently implemented a set of measures that include further head count optimization material reductions in third.

Robert Patrick Powers: Monty spend and efforts to tightly control and contain costs.

Philipp Stratmann: These measures are fully implemented and focus particularly on non-revenue generating engineering and GNA. These measures enable us to continue delivering for our customers, operate the business, and execute the strategy we have laid out. Moving forward, we plan to leverage the opportunities in front of us to increase our market presence, expand our geographical focus, and improve operational efficiencies. We are confident that these efforts will drive sustainable growth and create long-term value for our shareholders.

Robert Patrick Powers: These measures are fully implemented and focus, particularly on non revenue generating engineering and G&A.

Philipp Stratmann: These measures enable us to continue delivering for our customers, operate the business, and execute the strategy we have laid out. Moving forward, we plan to leverage the opportunities in front of us to increase our market presence, expand our geographical focus, and improve operational efficiency. We are confident that these efforts will drive sustainable growth and create long-term value for our shareholders. Thank you. Before I hand back to Bob for his update on the financials, I want to remind you that we are holding a special meeting of the shareholders on August 30th to vote on an increase in our authorized shares to enable us to participate fully in the rapidly evolving Autonomous Ocean Operations Plan. Now, I will hand over to Bob to discuss our financial performance in more detail.

Robert Patrick Powers: These measures enabled us to continue delivering for our customers operate the business and actually execute the strategy we have laid out.

Robert Patrick Powers: Moving forward, we plan to leverage the opportunities in front of us to increase our market presence.

Expand our geographical focus and improve operational efficiencies.

Robert Patrick Powers: We are confident that these efforts will drive sustainable growth and create long term value for all shareholders. Thank.

Philipp Stratmann: Thank you. Before I hand back to Bob for his update on the financials, I want to remind you that we are holding a special meeting of the shareholders on August 30th to vote on an increase in our authorised shares to enable us to participate fully in the rapidly evolving autonomous ocean operations market.

Speaker Change: Thank you.

Speaker Change: Before I hand back to Bob for his update on the financials I want to remind you that we are holding a special meeting of the shareholders on August 30th to vote on an increase in our authorized shares to enable us to participate fully in the rapidly evolving autonomous Ocean operations market now I will hand over to Bob to discuss our final.

Bob Powers: Now I will hand over to Bob to discuss our financial performance in more detail. Thanks, Philip. Let's begin with revenue. In Q424, our revenue is $1.6 million, bringing total revenue for our fiscal year ended April 30th, 2024, to $5.5 million, representing a 102% increase in revenue over fiscal year 2023. Combined with the 55% growth in revenue we experienced in fiscal 2023, fiscal 2024 revenue increased in excess of 3x over the past two years. This growth can be attributed to the conversion of backlog from our strong performance in WAMB sales and strong growth in orders and pipeline.

Robert Patrick Powers: Sure performance in more detail.

Robert Patrick Powers: Thanks, Phil.

Robert Patrick Powers: Let's begin with revenue. In Q4-24, our revenues were $1.6 million, bringing total revenue for our fiscal year ended April 30th, 2024, to $5.5 million, and representing a 102% increase in revenue over fiscal year 2020. Combined with the 55% growth in revenue we experienced in fiscal 2023, fiscal 2024 revenue increased in excess of 3x over the past two years. This growth can be attributed to the conversion of backlog from our strong performance in WAMB sales and strong growth in orders and pipelines. Our orders were $6.6 million for the year and growing.

Robert Patrick Powers: Let's begin with revenue in.

Robert Patrick Powers: In Q4 of 24, our revenues were $1 $6 million, bringing total revenue for our fiscal year ended April 32024 to $5 5 million and representing a 102% increase in revenue over fiscal year 2023.

Robert Patrick Powers: Combined with the 55% growth in revenue we experienced in fiscal 2023 fiscal 'twenty 'twenty four revenue increased in excess of three X over the past two years.

Robert Patrick Powers: This growth can be attributed to the conversion of backlog from our strong performance and wham be sales and strong growth in orders and pipeline.

Bob Powers: Our orders were $6.6 million for the year and growing. We expect; we continue to expect order activity and revenue to ramp for fiscal 2025. Our gross profit for Q424 stood at $0.9 million, bringing the full year gross profit to $2.8 million. A significant increase over the prior year's full gross profit of $0.9 million. Again, this improvement marks the second year in a row in which our year-over-year gross margin has improved dramatically, as we registered a movement from negative gross margin to positive gross margin in fiscal 2023. This improvement is attributed to our unmanned vehicle business, particularly the higher margin WANB leasing business.

Robert Patrick Powers: Our orders were $6 6 million for the year and growing.

Robert Patrick Powers: We expect, and continue to expect, order activity and revenue to ramp for fiscal 2024. Our gross profit for Q4-24 stood at $0.9 million, bringing the full-year gross profit to $2.8 million, a significant increase over the prior year's full gross profit of $0.2 million. Again, this improvement marks the second year in a row in which our year-over-year gross margin has improved dramatically as we registered a movement from negative gross margin to positive gross margin in fiscal 2020-2021. This improvement is attributed to our unmanned vehicle business, particularly the higher margin WAMBI leasing.

Robert Patrick Powers: We expect we continue to expect order activity and revenue to ramp for fiscal 2025.

Robert Patrick Powers: Our gross profit for Q4, 'twenty four stood at <unk> $9 million, bringing our full year gross profit to $2 8 million a significant increase over the prior year's full gross profit a point $2 million.

Robert Patrick Powers: This improvement marks the second year in a row in which our year over year gross margin has improved dramatically as we registered a movement from negative gross margin to positive gross margin in fiscal 2023.

Robert Patrick Powers: This improvement is attributed to our unmanned vehicle business.

Robert Patrick Powers: Particularly the higher margin will be leasing business I'm enthused about progress we've made in this area and our momentum heading into fiscal year 2025.

Bob Powers: I'm enthused about progress we've made in this area and a momentum heading into Fiscal Year 2025. Our operating expenses for Q424 amounted to $7.5 million and $32.2 million for fiscal 2024. The year-to-date figure includes approximately $3.9 million and extraordinary expenses related to the company defending litigation and other failed offensive tactics relative to the dissonant shareholder activity previously described by Philip. These costs included legal fees, advisory expenses, and other related costs. We hope for these to be one time costs, although there can be no guarantee that we will not incur similar costs in the future. As for the net result, we reported a net loss of $6.7 million for Q424, bringing net loss for fiscal 2024 to $27.5 million.

Robert Patrick Powers: I'm enthused about the progress we've made in this area and the momentum heading into fiscal year 2021. Our operating expenses for Q4-24 amounted to $7.5 million and $32.2 million for fiscal 2021. The year-to-date figure includes approximately $3.9 million in extraordinary expenses related to the company defending litigation and other failed offensive tactics, relative to the dissonant shareholder activity previously described by Phil. These costs include legal fees, advisory expenses, and other related costs.

Robert Patrick Powers: Our operating expenses for Q4, 'twenty four amounted to $7 $5 million and $32 2 million for fiscal 2024.

Robert Patrick Powers: The year to date figure includes approximately $3 $9 million and extraordinary expenses related to the company the pending litigation and other failed offensive tactics relative to the dissident shareholder activity previously described by Philip These.

Speaker Change: These costs included legal fees advisory expenses and other related costs, we hope for the used to be one time cost. Although there can be no guarantee that we will not incur similar costs in the future.

Robert Patrick Powers: We hope these to be one-time costs, although there can be no guarantee that we will not incur similar costs in the future. As for the net result, we reported a net loss of $6.7 million for Q4-24, bringing the net loss for fiscal 2024 to $27.5 million, as compared to a net loss of $26.3 million for fiscal 2025. This is despite the materially higher extraordinary expenses I just mentioned. We continue to manage your costs tightly, making targeted investments in the personnel and structure needed to support our strategy and plans for growth.

Speaker Change: As for the net result, we reported a net loss of $6 7 million for Q4, 'twenty four bringing net loss for fiscal 2024 to $27 $5 million as compared to a net loss of $26 3 million for fiscal 2023.

Bob Powers: As compared to a net loss of $26.3 million for fiscal 2023. This is the supply to materially higher extraordinary expenses I just noted. We continue to manually across tightly making targeted investments in the personnel and structure needed to support our strategy and plans for growth. We expect our operating expenses to decrease materially going forward, and as a result of our plan to achieve profitability. Finally, our backlog at April 30, 2024, stands at $4.9 million as compared to $4 million in the prior year. A significant portion of this increase is driven by our previously announced recent expansion into Latin America, as well as the recurring revenues to be generated under long-term leasing contracts.

Speaker Change: This is despite a materially higher extraordinary expenses I just noted.

Speaker Change: We continue to manage our cost tightly making targeted investments in the personnel and structure needed to support our strategy and plans for growth.

Robert Patrick Powers: We expect our operating expenses to decrease materially going forward and as a result of our plan to achieve profitability. Finally, our backlog at April 30th, 2024 stands at $4.9 million, as compared to $4 million in the prior year. A significant portion of this increase is driven by our previously announced recent expansion into Latin America, as well as the recurring revenues to be generated under long-term leasing contracts. On the balance sheet front, combined cash, unrestricted cash, cash equivalents, and short-term investments as of January 31st, 2024 totaled $3.2 million. Notably, we continue to maintain a debt-free balance sheet with no bank debt in our financial structure.

Speaker Change: We expect our operating expenses to decrease materially going forward and as a result of our plan to achieve profitability.

Speaker Change: Finally, our backlog at April 30 of 2024 stands at $4 $9 million as compared to $4 million in the prior year.

Speaker Change: A significant portion of this increase was driven by our previously announced recent expansion into Latin America as well as the recurring revenue to be generated under long term leasing contracts.

Bob Powers: On the balance sheet front, combined cash, unrestricted cash, cash equivalents, and short-term investments as of January 31, 2024 totaled $3.2 million. Notably, we continue to maintain a debt-free balance sheet with no bank debt in our financial structure. You will also note our liability titled Earnout Payable for $1.1 million. This payable is due to the strong performance of our unmanned vehicles business during fiscal 2024 and represents the completion of the final Earnout period as to find that our purchasing sale agreement related to our acquisition of MIR in November 2021. In terms of cash flow, the net cash use and operating activities for fiscal 2024 amount of a $29.8 million.

Speaker Change: On the balance sheet front, our combined cash unrestricted cash cash equivalents and short term investments as of January 31, 2024 totaled $3 2 million.

Speaker Change: Notably we continue to maintain a debt free balance sheet with no debt bank debt and a financial structure.

Speaker Change: You'll also note a liability titled earn out payable for $1 $1 million. This payable is due to the strong performance of our unmanned vehicles business during fiscal 2024 and represents the completion of the final earn out period as defined in our purchase and sale agreement related to our acquisition of MH.

Speaker Change: Our November 2021.

Speaker Change: In terms of cash flow the net cash used in operating activities for fiscal 2024 amount of a $29 $8 million.

Robert Patrick Powers: You will also note our liability titled earn-out payable for $1.1 million. This payable is due to the strong performance of our Unmanned Vehicles business during Fiscal 2024 and represents the completion of the final earn-out period as defined in our Purchase and Sale Agreement related to our acquisition of MAR in November 2021. In terms of cash flow, the net cash used in operating activities for fiscal 2024 amounted to $29.8 million, which primarily reflects our net loss.

Bob Powers: This primarily reflects our net loss. The payout of employment bonus has accrued during fiscal year 2023, the payment of the Earnout accrued during fiscal 2023, as well as the payment of expenses related to the dissonance shareholder activities as I just mentioned. Finally, you will note that our inventory bounds increased by approximately $3.8 million to $4.8 million versus the priority. This investment inventory was necessary in order to satisfy backlog as well as our planning growth and revenue for fiscal 2025.

Speaker Change: This primarily reflects our net loss the payout of employment bonuses accrued during fiscal year 'twenty to 'twenty three.

Robert Patrick Powers: The payout of employment bonuses accrued during fiscal year 2023, the payment of the earnout accrued during fiscal 2023, as well as the payment of expenses related to the dissonant shareholder activities I just mentioned. Finally, you will note that our inventory balance increased by approximately $3.8 million to $4.8 million versus the prior year. This investment inventory was necessary in order to satisfy backlog, as well as our planned growth and revenue for fiscal 2024.

Speaker Change: Payment of the earn out accrued during fiscal 2023 as well as the payment of expenses related to the dissident shareholder activities as I just mentioned.

Speaker Change: Finally, you will note that our inventory balance increased by approximately $3 $8 million to $4 8 million versus the prior year.

Speaker Change: This investment inventory was necessary in order to satisfy backlog as well as our planned growth in revenue for fiscal 2025.

Bob Powers: That covers our financial update. Before we enter Q&A, I'd like to remind everyone that the purpose of today's call is to discuss our fiscal year 2024 results as well as our financial outlook. As we head into the Q&A, we ask that you limit your questions to these topics. Thank you.

Robert Patrick Powers: That covers our financial... Before we enter Q&A, I'd like to remind everyone that the purpose of today's call is to discuss our fiscal year 2024 results, as well as our financial outlook. As we head into the Q&A, we ask that you limit your questions to these topics. Thank you. At this time, Operator, can you open the floor for questions? Thank you.

Speaker Change: That covers our financial update.

Speaker Change: Before we enter Q&A I'd like to remind everyone that the purpose of today's call is to discuss our fiscal year 'twenty 'twenty four results as well as our financial outlook as we head into the Q&A. We ask that you limit your questions to these topics. Thank you.

Operator: At this time, operator, can you open the floor for questions? Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. The confirmation tone will indicate your line is in the question Q. You may press star two if you would like to remove your questions from the Q. Participants using speaker equipment and maybe necessary to pick up your hands that before pressing the star keys. One moment, please. While we pull for your questions.

Speaker Change: At this time, operator can you open the floor for questions.

Speaker Change: Thank you we will now be conducting a question and answer session.

Operator: 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 is in the question queue. You may press star 2 if you would like to remove your question. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start key. One moment, please, while we poll for your question. Our first questions come from the line of Jeff Grampp with Alliance Global Partners. Please proceed with your question.

Speaker Change: Like to ask a question. Please press star one on your telephone keypad.

Speaker Change: Confirmation tone will indicate your line is in the question queue you.

Speaker Change: You May press star two if he would like to remove your questions from the queue.

Speaker Change: 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 your questions.

Jeffrey Grampp: Our first questions come from the line of Jeff Grant with Alliance Global Partners. Please proceed with your questions. Morning, guys. Thank you for the time.

Speaker Change: Our first questions come from the line of Jeff Grant with Alliance Global Partners. Please proceed with your questions.

Good morning, guys. Thank you for the time.

Jeffrey Scott Grampp: Good morning, guys. Thank you for your time.

Speaker Change: It.

Jeffrey Scott Grampp: I was curious, first off, maybe we can start on the backlog side of things. You guys had some nice growth sequentially, and even over the last few months since that number, you guys have continued to announce some nice ones publicly. So just wondering if there's maybe a more recent backlog number that you guys can share, or maybe we need to wait another month or so for the next earnings release.

Jeffrey Grampp: Was was curious first off, maybe we can start on the backlog side of things. You guys have some nice growth sequentially and even over the last few months since that. That number, you guys have continued to announce some nice ones publicly.

Jeffrey Leon Campbell: Was curious first off maybe we can start on the on the backlog side of things you guys had some nice growth sequentially and even over the last few months. Since that's that number you guys have continued to announce some nice ones publicly. So just wondering if there's maybe a more recent backlog number that you guys can share or maybe we need to wait another month yourself for after the next earnings release.

Jeffrey Grampp: So just wondering if there's maybe a more recent backlog number that you guys can share, or maybe we need to wait another month or so for the next earnings release.

Speaker Change: Yeah.

Philipp Stratmann: Hi Jeff. Good morning. Thanks for being on.

Speaker Change: Hi, Jeff Good morning, Pat.

Philipp Stratmann: Hi, Jeff. Good morning. Thanks for being on. Yeah, you're entirely right. Obviously, there's been the growth has been fairly evident and steady, and we keep on scaling up. As Bob said, you know, we had just under $5 million a backlog at the end of the fiscal year that we're taking into the current fiscal year. We will be providing updates on that as that progresses at the next earnings call, but I think we're encouraging from our side. As we said, you know, we put out guidance that, you know, we think contracted orders for fiscal 25 are going to be 12.5 million.

Pat: Thanks for being on.

Philipp Stratmann: Yeah, you're entirely right. Obviously, growth has been fairly evident, and, you know, and steady, and we keep on scaling up. As Bob said, we had just under $5 million of backlog at the end of the fiscal year that we're taking into the current fiscal year. We will be providing updates on that as that progresses on the next earnings call, but I think what's encouraging from our side is that, as we said, we put out guidance that we think contracted orders for fiscal 25 are going to be $12.5 million, and I think revenues were very similar to that.

Speaker Change: Yeah, you're you're entirely right and obviously there has been the growth has been very evident.

Speaker Change: You know and steady and we keep on scaling up.

Speaker Change: And as Bob said, you know, we had just under $5 million of backlog at the end of the fiscal year that we're taking into the current fiscal year.

Speaker Change: We will be providing updates on that as that progresses at the next earnings call, but I think what's encouraging from our side you know as we said you know we put out guidance that you know we think contracted orders for fiscal 'twenty five we're gonna be 12, and a half million. I mean, you know revenues were very similar to that if you look at you know the fact that we've entered the.

Jeffrey Grampp: And I think revenues were very similar to that. If you look at, you know, the fact that we've entered the year with about $5 million a backlog plus what we announced, you know, I think we feel very comfortable that the targets we put out there are achievable and we'll continue on the growth trajectory. But we'll certainly provide updates as we go through the year. Fair enough, I appreciate that.

Philipp Stratmann: If you look at, you know, the fact that we entered the year with about $5 million of backlog plus what we announced, you know, I think we feel very comfortable that the targets we put out there are achievable, and we'll continue on the growth trajectory. But we'll certainly provide updates as we go through the year.

<unk>, yeah, yeah about $5 million of backlog plus what we announced you know I think we feel very comfortable that the targets. We put out there are achievable and will continue on the growth trajectory, but a.

Speaker Change: We will certainly provide updates as we go through the year.

Speaker Change: Fair enough I appreciate that.

Jeffrey Scott Grampp: Fair enough; I appreciate that. And with respect to that contracted order KPI that you guys put out there, what do you guys view as kind of the biggest risks to achieving that, whether those are, you know, external things that are perhaps out of your control, related to customer decision timelines, things of that nature, versus, you know, things that you guys are focused on internally, like what keeps you guys up at night with respect to meeting that KPI that's not out there?

Jeffrey Grampp: And with respect to that contracted order KPI that you guys put out there, what you guys do is kind of the biggest risks to achieving that, whether those are, you know, external things that are perhaps out of your control related to customer decision timelines, things of that nature versus, you know, things that you guys are focused on internally. Like what keeps you guys up at night with respect to meeting that KPI that's not out there? I think part of the things that we obviously constantly looking at is, you know, conversion from, you know, initial conversations through to getting the PO in hand and then delivering for our customers.

Speaker Change: And with respect to that Oh.

Speaker Change: Contracted order Kpis that you guys put out there what are you guys did he was kind of the biggest risks to achieving that whether those are external things that are perhaps out of your control related to customer decision timeline and things of that nature versus things.

Speaker Change: Things that you guys are focused on internally like what what keeps you guys up at night with respect to meeting that J P. I, that's not out there.

Speaker Change: I think part of the things that we're obviously constantly looking at as you know conversion from it.

Philipp Stratmann: I think part of the things that we're obviously constantly looking at is, you know, conversion from, you know, initial conversations through to getting the PO in hand and then delivering for our customers. It is important for us to continue to deliver high quality products because, As you've seen, several of our sales over the year have come from repeat customers. The benefit of repeat customers is obviously that that also materially reduces the time that we get from the conversation through to the next delivery.

Speaker Change: Initial conversations through to getting the Po in hand, and then delivering for our customers.

Philipp Stratmann: You know, it is important for us to continue to deliver high quality products. because, as you've seen, several of our sales over the year have come from repeat customers. The benefit of repeat customers is obviously that that also materially reduces the time that we get from the conversation through to the next delivery. We're also very targeted in the geographic expansions that we're looking at. We've had several recent announcements for Latin America, and you've seen several announcements for the Middle East. We're targeting those specifically. On those, there might be a slight delay that you see from contract order to revenue because you obviously going to have to go and ship systems that we currently assemble in the United States over to those destinations.

Speaker Change: It's it is it is important for us to continue to deliver high quality products.

Speaker Change: As you've seen several of our sales over the year have come from repeat customers. The benefit of our repeat customers is obviously that that also materially reduces the time.

Speaker Change: That we get from the conversation through to the next delivery.

Jeffrey Scott Grampp: I think we're also very targeted in the geographic expansions that we're looking at. We've had several recent announcements for Latin America, and you've seen several announcements for the Middle East. I think we're targeting those specifically. On those, there might be a slight delay that you see from contract to order to revenue because you're obviously going to have to go and ship systems that we currently assemble in the United States over to those destinations, and I think that's obviously always something we're looking at in terms of timing and where it sits within our quarters and facilities.

Speaker Change: And we are also very targeted and the geographic expansion that we're looking at we've had several recent announcements for Latin America, and you've seen several announcements for the middle East.

Philipp Stratmann: Great, that's helpful. And if I could just sneak one more in,

Speaker Change: You know, we're targeting very specifically on.

Those that might be a slight delay that you see from contractor order to revenue because you're obviously going to have to go and ship systems that we currently assembled in the United States over today's destinations and I think that's there's obviously always something we're looking at in terms of timing and where it sits within the hour.

Jeffrey Grampp: That's obviously always something we're looking at in terms of timing and where it sits within our quarters and fiscal year. Great, that's helpful.

Speaker Change: Kind of in our quarters on fiscal year.

Speaker Change: Great that's helpful and if I could just sneak one more in opex trended down nicely for him to wrap up the fiscal year you guys mentioned in the prepared remarks, continuing to evaluate some ways to perhaps improve that so is it fair to think that relative to that Q4 run rate that theres still some potential for opex improvement as well.

Jeffrey Grampp: If I could just sneak one more in, OpEx turned it down nicely to wrap up the fiscal year. You guys mentioned in the prepared remarks continuing to evaluate some ways to perhaps improve that. Is it fair to think that relative to that Q4 run rate, there's still some potential for OpEx improvement as we look into fiscal 25, or how should we think about the overall expense profile of the business moving forward? Yeah, I think that is a fair statement to make. As we said, we've further controlled and contained third-party expenditures. We've gone through a further headcount optimization and are really focusing on what is needed to be delivered.

Jeffrey Scott Grampp: OPEX trended down nicely to wrap up the fiscal year. You guys mentioned in the prepared remarks continuing to evaluate some ways to perhaps improve that. So, is it fair to think that, relative to that Q4 run rate, that there's still some potential for OPEX improvement as we look into fiscal 25? Or how should we think about the overall expense profile of the business moving forward?

Into fiscal 'twenty, five or how should we think about the overall expense profile of the business moving forward.

Philipp Stratmann: Yeah, I think that is a fair statement to make. I mean, as we said, we've further controlled and contained third-party expenditures, we've gone through a further headcount optimization, and we're really focusing on what is needed to be delivered. What's needed to be delivered is converting our system discussions into backlog, into revenues, operating our systems for our customers, and maintaining an edge where we continue to integrate solutions. And I think you would have seen a noticeable trend in us bringing on board more solution delivery partners, people like Teledyne, people like SES, you know, work we're going to be doing with Unique and others. I think all of those are going to help us bring down OPEX further and keep very tight control of the cost.

Speaker Change: Yeah, I think that that is a fair statement to make them as we said you know we've we've we've further.

Speaker Change: Controller and contained in our third party expenditures, we've gone through a further head count optimization and really focusing on what is needed to be delivered and what's needed to be delivered is converting our systems.

Philipp Stratmann: What needed to be delivered is converting our systems, systems discussions into backlog, into revenues, operating our systems for our customers and maintaining an edge where we continue to integrate solutions. I think you would have seen a noticeable trend in us bringing on board more solution delivery partners, people like Teladon, people like SES, work we're going to be help us bring down OpEx further and keep very tight control on the costs. Great to hear. We're looking forward to tracking progress. Thank you, you guys. Thank you, Jeff.

Speaker Change: Our system discussions into into backlog into revenues operating our systems for our customers.

Speaker Change: And you know maintaining an edge.

Speaker Change: We continue to integrate solutions and I think you would've seen a noticeable trend in us bringing on board more solution delivery partners people like tenet on people like S. Yes, you know what we're gonna be doing with unique and others. I think all of those are going to help us bring down opex further.

Speaker Change: Keep very tight control on our costs.

Speaker Change: Great to hear but unfortunately tracking progress. Thank you guys.

Jeffrey Scott Grampp: Great to hear. Looking forward to tracking the progress. Thank you, guys.

Jeffrey Leon Campbell: Thank you Jeff.

Operator: Thank you.

Speaker Change: Thank you. Our next question is come from the line of Shawn Severson with water Tower Research. Please proceed with your questions.

Shawn Severson: Thank you. Our next questions come from the line of Shawn Severson with Water Tower Research. Please proceed with your question.

Shawn Severson: Our next question is come from the line of Sean Severson with Water Tower Research. Please proceed with your questions. Thanks. Good morning, gentlemen. You talked a little bit about the commercial inflection point having hit, and we've seen a lot of that showing up in the results and in the items we discussed. But what I'm trying to get at is understanding was this is related to the time in the market and the commercialization of the product, or was it related to a greater sales effort, or are there certain things you could point to that really seem to have pushed the commercialization inflection point through quickly here.

Shawn Severson: Thanks. Good morning, gentlemen. Philipp, you talked a little bit about the commercial inflection point having hit, and we've seen a lot of that showing up in the results and in the items you discussed, but what I'm trying to get at is understanding... Was this just related to the time in the market and the commercialization of the product or was it related to a greater sales effort or are there certain things you can point to that really seem to have, you know, pushed the commercialization inflection point through quickly here, you know, and I'd say in like the last six months it's really been noticeable.

Shawn Severson: Thanks, Good morning, gentlemen.

Speaker Change: And so to me.

Shawn Severson: You've talked a little bit about the commercial inflection point, having hit and we've seen a lot of that showing up in the results and the items you discussed, but I'm trying to get at is understanding.

Speaker Change: Was this related to a time in the market and the commercialization of.

Shawn Severson: The product or was it related to a greater sales effort or are there certain things you can point to that really seem to have pushed.

Speaker Change: Push the commercialization and flagship quite through quickly here, you're not I'd say like the last six months, it's really been noticeable.

Shawn Severson: I'd say in the last six months, it's really been noticeable.

Philipp Stratmann: Yeah, good morning, Sean. Thanks for the question. I think you're right. There has definitely been a change in pace that we've seen. But I wouldn't just put it down to market conditions. Obviously, I think we all know what's going on in the markets in terms of autonomy, robotics, and artificial intelligence. But I think at the heart of it lies the fact that we developed a set of solutions. that were targeted at specific segments of the market. We brought on board a very targeted commercial team, and obviously with Matt Badini, our Chief Commercial Officer, really focusing on the ocean technology, defense and security, and, you know, offshore energy markets.

Speaker Change: Yeah, Good morning, Sean and thanks for the question.

Philipp Stratmann: Yeah, good morning, Shawn, and thanks for the question. I think you're right; there's definitely been a change in pace that we've seen. But I wouldn't just put it down to market conditions. Obviously, I think we all know what's going on in the markets in terms of autonomy, robotics, and artificial intelligence. But I think at the heart of it lies the fact that we developed a set of solutions that were targeted at specific segments of the market.

Speaker Change: I think you're right, there's definitely been a change in pace that we've seen.

Speaker Change: But I wouldn't.

Speaker Change: Just put it down to market conditions.

Speaker Change: I think you know we all we all know what's going on in the markets in terms of autonomy robotics and artificial intelligence, but I think.

Speaker Change: At the heart of it lies the fact that we developed a set of solutions.

Speaker Change: <unk> targeted at specific segments of the market, we brought onboard a very targeted commercial team.

Philipp Stratmann: We brought on board a very targeted commercial team, and obviously, with Matt Bedini, our Chief Commercial Officer, really focusing on the ocean technology, defense and security, and offshore energy markets, and targeting customers and regions where we know that there is an actual market for our systems and solutions. And then the other thing that we did, and it's one of the reasons why we announced at the end of calendar 2023 that we had substantially completed all of our R&D activities, is that we focused on making the product and solution that we have something that customers find easy to use and that actually provides a solution that saves them money and saves them carbon emissions instead of trying to perfect something that isn't yet operating.

Speaker Change: And then obviously with Mike <unk>, our Chief commercial officer really focusing on the Ocean technology.

Speaker Change: <unk> security and offshore energy markets.

Philipp Stratmann: And targeting customers and regions where we know that there is an actual market for our systems and solutions.

Speaker Change: I'm targeting customers and regions, where we know that there is an actual market for our systems and solutions I think the other thing that we did and it's one of the reasons why we announced at the end of calendar 2023 that we substantially completed all of our R&D activities.

Philipp Stratmann: And then the other thing that we did, and is one of the reasons why we announced at the end of, you know, calendar 2023 that we, you know, substantially completed all of our R&D activities, is we focused on making the product and solution that we have, something that customers find easy to use, and that actually provide a solution that saves them money and saves them carbon emissions instead of, you know, trying to, you know, perfect something that isn't yet operating. So we just became a lot more targeted and tenacious in going after opportunities in the market and working with our customers to help themselves their problems. You know, obviously, you know, general market trends towards acceptance of autonomy help, but I think a lot of it has been down to a very targeted effort and focusing on doing what we do well instead of adding a much broader base of products that we could bring to that.

Speaker Change: <unk> is we focused on making the product and solution that we have something that customers find easy to use and that actually provide a solution that saves them money and saves them carbon emissions instead of trying.

Speaker Change: Trying to perfect something that isn't yet operating so we I think we we just became a lot more targeted.

Philipp Stratmann: So I think we just became a lot more targeted and tenacious in going after opportunities in the market and working with our customers to help them solve their problems. Obviously, general market trends toward acceptance of autonomy help. But I think a lot of it has been down to a very targeted effort and focusing on doing what we do well instead of adding a much broader base of products that we could bring to bear.

Speaker Change: Tenacious in going after opportunities in the market and working with our customers to help them solve their problems. You know obviously, you know general market trends towards acceptance of autonomy help.

Speaker Change: But I think a lot of it has been down to a very targeted effort.

Speaker Change: Focusing on doing what we do well instead of adding a much broader base of products that we could bring to that.

Shawn Severson: And kind of a follow-on to that. You've mentioned, you know, a shorter sales cycle with existing customers, which makes sense, right? They're familiar with it, and we would expect that. Are you seeing a shortening of a sales cycle with new customers as well? So, you know, I guess always the concern is anything government-related or project-related like this. The sales cycles are very long and tenuous, in some cases. But what are you seeing with non-reoccurring customers but new customers as it relates to that?

Speaker Change: And kind of a follow on to that you mentioned.

Shawn Severson: And kind of a follow-on to that, you mentioned a shorter sales cycle with existing customers, which makes sense, right? They're familiar with it, and we would expect that.

Speaker Change: Short sales cycle with existing customers, which makes sense right, they're familiar with and we would expect that.

Philipp Stratmann: Are you seeing a shortening of the sales cycle with new customers as well? So, you know, I guess the concern is always anything government-related or project-related like this. The sales cycles are very long and tenuous in some cases. But what are you seeing with non-recurring customers but new customers as it relates to that?

Speaker Change: Are you seeing a shortening of the sales cycle with new customers as well. So that's always a concern as anything government related or project related like this the sales cycles are very long and tenuous in some cases, but what are you seeing with non reoccurring customers, but new customers as it relates to that.

Shawn Severson: That's a great question. I mean, Bob mentioned in his remarks, obviously, and you can see it on the balance sheet, our inventory numbers have gone up. And that helped us reduce... [inaudible] and deploy. Under being able to bring a demonstration system to a customer when they say, hey, this seems interesting, how does this work? We can turn around and go, well, why don't you come and see us, and we're going to demonstrate it to you because we have one in the water.

Shawn Severson: Yeah, that's a great question.

Speaker Change: Yeah. That's a great question I mean, Bob mentioned in his remarks, obviously and you can see it on the balance sheet. Our inventory number has gone up and that has helped us reduce the sales cycle that we're seeing with new customers as well because what we can now do is actually I just have my team in the middle of the night do a demo iPhone overseas.

Philipp Stratmann: I mean, Bob mentioned in his remarks, obviously, and you can see it on the balance sheet. Our inventory number is gone up. And that helped us reduce the sales cycle that we're seeing with new customers as well. Because what we can now do is, actually, I just had my team in the middle of the night do a demo for an overseas customer just tonight, just last night. It's the fact that having systems out and deployed under being able to bring a demonstration system to a customer when they're saying, "Hey, this seems interesting." How does this work?

I'm just just just Tonight just last night is the fact that having systems out and deployed them.

Speaker Change: So being able to bring a demonstration system to a customer when they're saying Hey, this seems interesting how does this work we can turn around and gang well why why don't you come and see us and we're going to demonstrate it to you because we have one in the water or we can go in the case of the vehicles shipped to a customer, saying well why don't you try it out for a week.

Philipp Stratmann: We can turn around and going, well, why didn't you come and see us? And we're going to demonstrate it to you because we have one in the water. Or we can go in the case of the vehicle's shiffer to a customer saying, well, why don't you try it out for a week? We'll come along. We'll provide our technicians, and it materially shortens that cycle because you're no longer going through paper exercises and then feasibility studies. And then you're going through the next round and, you know, the kind of the longer project approach that I think you sometimes see on, you know, kind of, you know, renewable developments per se.

Shawn Severson: Or we can, in the case of the vehicles, ship them to a customer and say, well, why don't you try it out for a week? We'll come along, and we'll provide our technicians. And it materially shortens that cycle because you're no longer going through paper exercises and then feasibility studies, and then you're going through the next round. The longer project approach that I think you sometimes see on renewable developments per se, it enables us to go and step into what is more of an OPEX consideration on our customer side, as opposed to them needing to squeeze it as CAPEX into a larger project.

Speaker Change: We will come and will come along we'll provide uptake missions.

Speaker Change: Materially shortens that cycle, because you're no longer going through paper exercises and then feasibility studies and then you're going to the next round.

Speaker Change: The kind of the longer project approach that I think you sometimes see on you know kind of renewable development per se. It enables us to go and step into what is more of an opex consideration of our customer side as opposed to them needing to squeeze it as capex into a larger project.

Philipp Stratmann: It enables us to go and step into what is more of an OPEX consideration at our customer side, as opposed to them needing to squeeze it as capex into a larger project.

Shawn Severson: Thank you for that thought.

Philipp Stratmann: Thanks for that, Philip. My last question is related to anti-political risk. I know it's such an emerging market, there probably isn't a lot, but we do get the question sometimes, you know, is there any difference to you what happens in November as far as rollouts or commercialization is concerned?

Speaker Change: Thanks for that my last question is.

Shawn Severson: My last question is related to any political risk. I know it's such an emerging market that probably isn't a lot, but we do get questions sometimes, you know, is there any difference to you?

Speaker Change: Related to any political risk I know, there's such an emerging market there probably isn't a lot, but we do get the question. Sometimes you know is there any difference to you what happens in November as far as as far as Rollouts of commercialization.

Philipp Stratmann: What happens in November as far as rollouts or commercialization? I appreciate the question, Shawn. We look at the fact that we provide systems that strengthen national security. And in our view, no matter what happens in November, national security and, you know, as part of our ocean security, is going to be remaining a paramount importance to the United States and to our allies. At the same time, if you're looking at it globally, population keeps increasing globally, and there's an increasing demand for energy. So whether and the fact that our systems can be used by oil and gas producers or by offshore wind producers.

Speaker Change: No I appreciate the question Sean.

Shawn Severson: I appreciate the question, Shawn. We look at the fact that we provide systems that strengthen national security. And in our view... no matter what happens in November, national security, as part of our ocean security, is going to remain paramount importance to the United States and to our allies. At the same time, if you're looking at it globally, the population keeps increasing globally, and there's an increasing demand for energy. So whether, and the fact that our systems can be used by oil and gas producers or by offshore wind.

Speaker Change: We look at the fact that we provide systems that strengthen national security.

Speaker Change: And in.

Speaker Change: And all of you.

Speaker Change: No matter what happens in November.

Speaker Change: National Security and you know as part of the Ocean security is going to be remaining a paramount importance to the United States onto our allies.

Speaker Change: Same time, if you're looking at it globally any population keeps increasing globally and there is an increasing demand for energy.

Speaker Change: So weather and the fact that our systems can be used for oil and gas producers all by offshore wind producers. So we we don't see a material political risk and that's really because you know we provide dual use technologies that enable any and all operators out in the ocean to keep operations secure.

Philipp Stratmann: So we don't see a material political risk, and that's really because, you know, we provide dual-use technologies that enable any and all operators out in the ocean to keep operations secure, cheaper, and, if so desired by them, reduce their carbon footprint as well.

Shawn Severson: So we don't see a material political risk, and that's really because we provide dual-use technologies that enable any and all operators out in the ocean to keep operations secure, cheaper, and, if they so desire, reduce their carbon footprint as well.

Speaker Change: Cheaper.

Speaker Change: And if so desired by them reduce their carbon footprint as well.

Shawn Severson: Thanks, and congratulations on the progress, Shawn, and I'll step back on the queue. Thank you, Shawn.

Speaker Change: Alright, thanks, and congratulations on the progress gentlemen, I'll step back in the queue.

Shawn Severson: Great, thanks. Congratulations on the progress, gentlemen. I'll step back in the queue.

Sean: Thank you Sean.

Operator: Thank you.

Peter <unk>: Thank you our next questions come from the line of Peter <unk> with Dawson James. Please proceed with your questions.

Peter G. Ruggiere: Thank you. Our next questions come from the line of Peter Ruggiere with Dawson James. Please proceed with your question.

Peter Ruggiere: Our next question has come from the line of Peter Rudger with Dawson James. Please proceed with your questions. You guys have growth. It sounds very great. I have a lot of questions, actually. The question on the oil and gas part of it, there was a contract for some of your working on several years back in the Gulf of Mexico with oil and gas commissioning. Are you guys still working towards that? Peter, I appreciate the question. I think that contract might predate most of us here. In general, we do still work with many of, or we provide systems to many of the oil and gas operators.

Peter <unk>: You guys have grown it sounds very great I have a lot of questions actually.

Peter G. Ruggiere: You guys have growth; it sounds very great. I have a lot of questions, actually. The question on the oil and gas part of it: on the oil and gas part of it, there was a contract, or some of you were working on, several years ago in the Gulf of Mexico with oil and gas decommissioning. Are you guys still working towards that?

Speaker Change: Just a question on.

Peter <unk>: On the oil and gas part of it.

Peter <unk>: Our contracts for some of them were working on several years back in the Gulf of Mexico oil and gas decommissioning are you guys still working towards that.

Speaker Change: Hi, Peter I appreciate the.

Philipp Stratmann: Hi Peter, I appreciate the question. I think that contract might predate most of us here. In general, we do still work with many of, or we provide systems to many of the oil and gas operators. As you've seen, a lot of the work that we've done is instead of us going and working with the large oil and gas operators directly, we work through their services. And that is what's helped us increase the pace with which we are getting to sales and orders.

Peter <unk>: The question.

Speaker Change: I think that contract my predate most of us here.

Speaker Change: In general we do still work with many of we provide systems to many of the oil and gas operators.

Philipp Stratmann: As you've seen, a lot of the work that we've done is instead of us going and working with the large oil and gas operators directly, we're working through their service providers. And that is what's helped us increase the pace with which we are getting to sales and orders. If you're looking at the work we've been doing with Samara, Samara does work for all of the large oil and gas providers. As a result of that, our vehicles are now starting to operate in that area. We are in ongoing discussions with various Tier 1 and Tier 2 service providers to look at buoys, to work on work for exclusions and monitoring like we did in the North Sea, do work on well-head monitoring and so on and so forth.

Speaker Change: You've seen a lot of the work that we've done is instead of us.

Speaker Change: Going and working with the large oil and gas operators directly we are working through their service providers.

Speaker Change: And that is what has helped us increase the pace with which we are getting to sales and orders if you're looking at the work we've been doing with Tomorrow Tomorrow does work for all of the large oil and gas provide us. So as a result of that you know our vehicles are now starting to operate in that area. We are in ongoing discussions with.

Philipp Stratmann: If you're looking at the work we've been doing with Samara, Samara does work for all of the large oil and gas providers. So as a result of that, our vehicles are now starting to operate in that area. We are in ongoing discussions with various Tier 1 and Tier 2 service providers to look at buoys, to work on work for exclusions and monitoring like we did in the North Sea, to work on wellhead monitoring, and so on and so forth.

Speaker Change: With various tier one tier two service providers to look odd buoys to work on work for exclusions and monitoring like we you know we did in the North Sea do work on wellhead monitoring and so on and so forth. So it's certainly a segment we keep an active look on it.

Philipp Stratmann: So it's certainly a segment we keep an active eye on, but I think the approach to the segment has changed from going directly with the large oil and gas customers to the service providers because the service providers have a greater need for our systems and are able to specify them.

Philipp Stratmann: So it's certainly a segment we keep an active look on, but I think the approach to the segment has changed from going directly with the large oil and gas customers to the service providers because the service providers have a greater need for our systems and are able to expect them in more quickly. Okay, because yet we were working with Premier Royal for a long time in the Adriatic Sea, for that was for a while. Is that Billy still empowering that research facility in Chile? No, that contract was completed last year. And the buoy was returned to us, husband refurbished, and is currently being prepared for other deployments and projects that we are finalizing.

Speaker Change: Thank the approach to the segment has changed from going directly with the large oil and gas customers.

Speaker Change: To the service provider because the service providers have a greater need for our systems and are able to spec them and more quickly.

Speaker Change: Okay.

Peter G. Ruggiere: Okay, because you've been working with Premier Oil for a long time in the Adrionics area, for that was on for a while. Are you still, is that buoy still powering that research facility in Chile?

Speaker Change: Working with Premier oil for a long time in the Adriatic Sea.

Speaker Change: But that was.

Speaker Change: Awhile.

Speaker Change: Are you still is that buoys still powering that research facility in Chile.

Speaker Change: No that contract was completed last year.

Philipp Stratmann: No, that contract was completed last year, and the buoy was returned to us. It has been refurbished and is currently being prepared for other deployments and projects that we are finalizing.

Speaker Change: <unk> buoy was returned to us has been refurbished them.

Speaker Change: <unk> is currently being prepared for the deployment and on <unk>.

Speaker Change: <unk> that we are we are finalizing.

Philipp Stratmann: Okay. I heard you say that the buoy has more power now than it did before for producing more power. Is that correct? Yes, that is correct. So what we've done is, as we launched our next generation buoy in order to become the following model to the PB3, what we did is we reduced all externally moving parts on the system and moved the wave energy conversion system entirely inside of the buoy. What that's enabled us is the ability to provide solar panels and small wind turbines on top of the buoy, which provide additional power generation capabilities.

Speaker Change: Okay.

Peter G. Ruggiere: I heard you say that the Buoy has more power now than it did before for producing more power. Is that correct?

Speaker Change: I heard you say that you're the buoy the newer though he has more power now.

Speaker Change: Like I said before we're producing more power.

Speaker Change: Correct.

Speaker Change: Yes that is correct. So what we've done is as we launched our next generation Barry in order to become the follow on model to the P. B III. What we did is we reduced or externally moving parts on the system and moved to wave energy conversion system and <unk>.

Philipp Stratmann: Yes, that is correct. What we've done is, as we launched our next generation buoy in order to become the follow-on model to the PB3, we reduced all externally moving parts on the system and moved the wave energy conversion system entirely inside of the buoy. What that has enabled us is the ability to provide solar panels and small wind turbines on top of the buoy, which provides additional power generation capability.

Speaker Change: <unk> inside of the buoy.

Speaker Change: That's enabled us is the ability to provide solar panels and small wind turbines on top of the movie, which provide additional power generation capabilities.

Philipp Stratmann: It also means that we have opened a much broader range of regions that we can now supply product into. We recently announced that we are providing a buoy into the Middle East. There's very little wave activity in the Gulf region. But having the ability or now having the solar and wind systems on there means that we can also serve as those markets. We still work on the same principle that any power we generated is used to be, you know, is power, is used to be stored as energy in the battery packs and then we power all the payloads from the batteries that we have inside of our buoy.

Philipp Stratmann: It also means that we have opened a much broader range of regions that we can now supply product to. We recently announced that we are providing a buoy to the Middle East. There's very little wave activity in the Gulf region, but having the ability or now having the solar and wind systems on there means that we can also serve as those. We still work on the same principle, that any power we generate is used to be stored as energy in the battery packs, and then we power all the payloads from the batteries that we have inside of us.

Speaker Change: It also means that we have opened a much broader range of regions that we can now supply products into.

Speaker Change: And we recently announced that we are providing a buoy into the middle East.

Speaker Change: Theres very little wave of activity in the Gulf.

Speaker Change: Region, but having the ability now having the solar and wind systems on there means that we can also service those markets.

Speaker Change: We still work on the same principle that any power. We generated is used to be you know as power is used to be stored energy in the battery packs and then we power all the pilots from the batteries that we have inside of others.

Peter Ruggiere: Okay. How many buoys do you have in the water right now? I'd have to double-check that number for you. I think we have a couple of demonstration systems out, and we are shipping a couple of systems over for various customers. Okay. What do you see the biggest market for the wham that's really interesting with the drones and stuff like that? Is that going to be the biggest market, or is it the oil and gas possibly, or the illegal fishings? I know. And you did a big study in Japan, and you have stuff going in, I guess, in the Philippines a couple of years back.

Speaker Change: Okay.

Peter G. Ruggiere: How many buoys do you have in the water right now, by any chance?

Speaker Change: How many how many buoys do you have in the water right now right.

Speaker Change: Chance.

Speaker Change: I'd have to I'd have to double check that number for you I think it's a we have a we have a couple of demonstration systems out and we are shipping a couple of systems over for various customers.

Philipp Stratmann: I'd have to, I'd have to double check that number for you. I think it's, we have a couple of demonstration systems out, and we are shipping a couple of systems over for various customers.

Peter G. Ruggiere: Okay, what do you see the biggest market for the whams looking really interesting with the drones and stuff like that? Is that going to be the biggest market, or is it oil and gas possibly or illegal fishing? I know you did a big study in Japan, and you have stuff going on and I guess in the Philippines a couple years back, and then a COVID thing happened, and everything got kind of delayed. I believe that's correct

Speaker Change: Okay. What do you see the biggest market cause a whammy really interesting with the drones and stuff like that that is going to be the biggest market or is that the oil and gas, possibly or illegal fishing. So I know you.

Speaker Change: You did a big study in Japan, and yourself going on and I guess in the Philippines. A couple years back and then the Covid thing happened and everything got kind of got delayed I believe that's correct.

Philipp Stratmann: And then the COVID thing happened, and everything kind of got delayed. I believe that's correct. I think, yeah, we would, we would, we would, we look at this under mirrors, you know, this kind of overarching umbrella that we put together. We look at illegal fishing really being part of defense and security, and we do see defense and security as a major market. And it so happens that, you know, the bulk of defense and security is the government as the end customer. But again, similar to oil and gas, we are approaching that by working with, you know, larger prime contractors that are able to help navigate the contracting mechanisms that exist within the government so we can provide systems more quickly.

Philipp Stratmann: I think, yeah, we would, we would, we look at this under the mirrors, you know, this kind of overarching umbrella that we put together. We look at illegal fishing really being part of defense and security. And we do see defense and security as a major market. And it so happens that, you know, the bulk of defense and security is the government as the end customer, but again, similar to oil and gas, we are approaching that by working with, you know, larger prime contractors that are able to help navigate the contracting mechanisms that exist within the government so we can provide systems more quickly.

Speaker Change: Yes, we would we would we look at this under memorize.

Speaker Change: The overarching umbrella that we put together, we look at illegal fishing really being part of defense and security.

Speaker Change: And we do see defense and security is a major market and it. So happens that you know the bulk of defense and security is.

Speaker Change: The government as the end customer, but again similar to oil and gas we are approaching that by working with you know larger prime contractors that are able to help navigate the contracting mechanisms that exist within the government. So we can provide systems more quickly into that.

Philipp Stratmann: to that. And we do see opportunities for both of our underlying platforms: you know, vehicles for autonomous roaming and buoys for permanent, you know, resident monitoring and intelligence surveillance and reconnaissance. I think offshore energy, which includes oil and gas, is going to continue to be an important market for us. But what is interesting to us is that many of the applications that are being utilized, but, you know, our customers use our systems for an offshore energy are similar to the applications that the defense and security side uses, which is around, you know, monitoring using the ability that we could launch aerial drones, using the ability we can launch underwater drones to do, you know, offshore energy infrastructure inspections, and also doing general survey work.

Philipp Stratmann: And we do see opportunities for both of our underlying platforms, you know, vehicles for autonomous roaming and buoys for permanent, you know, resident monitoring and intelligence surveillance and reconnaissance. I think offshore energy, which includes oil and gas, is going to continue to be an important market for us. But what is interesting to us is that many of the applications that are being utilized or that our customers use our systems for in offshore energy are similar to the applications that the defense and security side uses, which are around monitoring, using the ability that we can launch aerial drones, using the ability we can launch underwater drones to do offshore energy infrastructure inspections, and also doing general survey work. So we have found that the solutions could provide overlap in those areas, but I would see us continuing to service both markets.

Speaker Change: We do see opportunities for both of our underlying platforms vehicles for autonomous roaming.

Speaker Change: And Dewey for permanent resident monitoring and intelligence surveillance and reconnaissance.

Speaker Change: I think offshore energy, which includes oil and gas is going to continue to be an important market for us, but what is interesting to us is that many of the applications.

Speaker Change: <unk> are being utilized.

Speaker Change: Our customers use our systems for an offshore energy are similar to the applications not the defense and security sides uses which is around monitoring using the ability that we can launch aerial drones using the ability we can enlarge underwater drones to do offshore energy infrastructure inspections.

Speaker Change: And also doing General survey work. So we have found that the solutions could provide overlap in those areas, but I would see us continuing to service based markets.

Philipp Stratmann: So we have found that the solutions could provide overlap in those areas, but I would see us continuing to service base markets. Okay, on your couple of questions on the background, I understand, but the pipeline you have on April 30th is at 71 million. And then the quarter before it was 77 million at the end of the third. Are you can, the fact that it went down a little bit, is that because you're converting it into actually revenue at this point? And what is that pipeline consist of my question on that? Yes, so part of it is because we are converting opportunities in the pipeline into backlog, and then obviously from backlog into revenues.

Peter G. Ruggiere: Okay, on your, like, a couple questions on... The backlog, I understand, but the pipeline you have on April 30th is at 71 million. And then the quarter before was $77 million at the end of the third. Are you... The fact that it went down a little bit, is that because you're converting it into actual revenue at this point? And what does that pipeline consist of? My question on that.

Speaker Change: Okay.

Speaker Change: And on your like a couple of questions on.

Speaker Change: But the backlog I understand with the pipeline you have on April 30th is at 71 million.

Speaker Change: And then the quarter before was $77 million at the end of the third are you.

Speaker Change: And it went down a little bit is that because you're converting into actually revenue at this point and what does that pipeline consist of my question on that.

Philipp Stratmann: Yes, so part of it is because we are converting opportunities in the pipeline into backlog, and then, obviously, from backlog into revenues. I think we put out a new IR deck last night, and the current pipeline is at 85 million, and it consists of opportunities under negotiation, opportunities where we have submitted proposals, opportunities where we've executed NDAs with customers and are scoping what a future program, project, or contract could or would look like.

Speaker Change: Yes, it's a part of it is because we are converting converting opportunities in the pipeline into backlog and then obviously from backlog into revenues I think we are we put our new IR deck last night and current pipeline is at $85 million and a consists of.

Peter Ruggiere: I think we put our new IR deck last night in a current pipeline is at 85 million, and it consists of opportunities under negotiation, opportunities where we have submitted proposals, opportunities where we've executed NDAs with customers, and are scoping what a future program project contract could look like. So there will always be some fluctuation, but what is encouraging to us is, on the basis of the size that we've got, as long as we keep on pulling down a small percentage of what we've got in the pipeline, and then keep on refilling the pipeline, we get a really nice churn that we can start seeing that you're going to translate into year-on-year growth and a steady baseline of revenues.

Speaker Change: Opportunities under negotiation opportunities, where we have submitted proposals opportunities, where we've executed nda's with customers on a scoping what a future program project contracts could would look like say they will always be some fluctuation, but what is encouraging to us is on the bay.

Philipp Stratmann: So there will always be some fluctuation, but what is encouraging to us is that, on the basis of the size that we've got, as long as we keep on pulling down a small percentage of what we've got in the pipeline and then keep on refilling the pipeline, we get a really nice churn that we can start seeing that is going to translate into year-on-year growth and a steady baseline of revenues.

Speaker Change: <unk> of the size that we've got as long as we keep on pulling down only a small percentage of what we've got in the pipeline and then keep on refilling. The pipeline. We've got a really nice churn that we can start seeing that going to translate into year on year growth on a steady baseline of revenues.

Peter G. Ruggiere: Okay, and I believe your margins are about a gross margin of 50%. Correct around here?

Peter Ruggiere: Okay, and your margins are about close margin of 50 percent, correct, around there? Yeah, growth margins have sort of stabilized for the last few quarters in that 50 to 55 percent region. There used to be a lot lower, I believe. I think you're correct, I think, and a lot of that has got to do that we've changed from doing demonstrations or chasing recession development grants to having a set of commercially available solutions and platforms that we're providing to customers who are wanting to use these, and it's becoming much more of a, you know, it's a commercial service offering that we provide.

Speaker Change: Okay.

Speaker Change: Your margins are about gross margins are 50% correct around there.

Philipp Stratmann: Yeah, gross margins have sort of stabilized for the last few quarters in that 50 to 55 percent region.

Speaker Change: Yeah gross margins themselves as stabilized for the last few quarters in that 50% to 55% region.

Peter G. Ruggiere: It used to be a lot lower, I believe.

Speaker Change: There used to be a lot lower.

Speaker Change: Sure.

Philipp Stratmann: I think I think you're correct, and a lot of that has got to do with us having changed from doing demonstrations or, you know, chasing research and development grants to having a set of commercially available solutions and platforms that we're providing to customers who are wanting to use them, and it's becoming much more of a it's a commercial service offering that we provide.

Speaker Change: I think I think Youre correct, I think and a lot of that has got to do that we've changed from doing demonstrations or chasing research and development grants to having a set of commercially available solutions and platforms that we're providing to customers who.

Speaker Change: Our wanting to use these and it's becoming much more of a you know it's a commercial service offering that we provide.

Philipp Stratmann: Right, and maybe the last question, but the contract orders that you put on, it gets 25 guidance or exactly 12 and a half million dollars. because that includes everything, or is that just a well-number of certain kind of opinion? Could you do 50 million, 100 million in revenues? We're just 12.5 million; that's not the number for the entire year, is that for a total revenue? 12.5 is what we're putting out there as guidance for this year. You know, if you look at it, it would be, you know, 2.5x scale over the last year. You know, we did just over 2x from the year before that, and that is certainly what we see. That's sustainable growth that we can go and fulfill by maintaining tied control over costs and delivering high quality products because, you know, ultimately, we are still, you know, these things need to be built and need to be shipped. You know, but we are maintaining an ongoing focus on growth but doing growth without sacrificing quality and the ability to maintain margin.

Speaker Change: Right.

Speaker Change: It might be the last question, but.

Peter G. Ruggiere: Right. This might be the last question, but the contract orders that you put on 25 guidance are said to be $12.5 million. Does that include everything, or is that just a low number certain? In a sense, could you do $50 million, $100 million in revenues? 12 and a half million. That's not the number for the entire year. Is it for total revenue?

Speaker Change: Contract orders that you put on 25 got it guidance and are excited with 12 and a half million dollars.

Speaker Change: Does that include everything or is that just a low number of certain.

Speaker Change: Could you do.

Speaker Change: Millions of hundreds of millions in revenues.

Speaker Change: Over half a million that's not the number for the entire year or is it for total revenue.

Philipp Stratmann: Twelve and a half is what we're putting out there as guidance for this year. If you look at it, it would be a two and a half X scale over the last year. We did just over two X from the year before that, and that is certainly what we see. That's sustainable growth that we can achieve by maintaining tight control over costs and delivering high-quality products because, ultimately, these things need to be built and need to be shipped, but we are maintaining an ongoing focus on growth by doing growth without sacrificing quality and the ability to maintain margin.

Speaker Change: 12, and a half is what we're putting out there as guidance for this year.

Speaker Change: If you look at it it would be.

Speaker Change: Two and a half X scale over the last year and we did just have two eggs from the year before that and that that is certainly what we see that that's sustainable growth.

Speaker Change: And name that we can go and fulfill by maintaining tight control over costs and delivering high quality products. Because ultimately we are still you know these things need to be built and need to be shipped.

Speaker Change: But we are we are we are maintaining a you know ongoing focus on growth, but doing growth without sacrificing quality and the ability to maintain margin.

Peter Ruggiere: Okay. All right, well, thank you very much. No, thank you, Peter. Appreciate your question.

Speaker Change: Okay.

Speaker Change: Alright, well, thank you very much.

Peter G. Ruggiere: All right, well, thank you very much.

Peter G. Ruggiere: Thank you, Peter. I appreciate your question. Thank you for being a long-term shareholder.

Speaker Change: Thank you Peter I appreciate the question. Thank you for being a long term shareholder.

Philipp Stratmann: Thank you for being a long-term shareholder.

Speaker Change: Okay.

Operator: Thank you.

Speaker Change: Thank you we have reached the end of our question and answer session I would now like to turn the floor back over to Dr. Phillip Stratman for closing remarks.

Philipp Stratmann: Thank you. We have reached the end of our question and answer session. I would now like to turn the floor back over to Dr. Philipp Stratmann for a closing remarks.

Philipp Stratmann: We have reached the end of our question and answer session. I would now like to turn the floor back over to Dr. Philipp Stratmann for closing remarks. Thank you for being a shareholder and for supporting our ongoing growth and execution of our strategy. We are excited and look forward to continue to deliver for you, our customers, and all of our stakeholders.

Philipp Stratmann: Thank you for being a shareholder and for supporting our ongoing growth and execution of our strategy. We're excited and look forward to continuing to deliver for you, our customers, and all of our stakeholders.

Speaker Change: Thank you for being a shareholder and for supporting our ongoing growth and execution of our strategy.

We're excited and look forward to continuing to deliver for you our customers and all of our stakeholders. Thank you.

Philipp Stratmann: Thank you.

Speaker Change: Thank you. This does conclude today's teleconference. We appreciate your participation you may disconnect. Your lines at this time enjoy the rest of your day.

Operator: Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.

Operator: This just includes today's teleconference. We appreciate your participation.

Operator: You may disconnect your lines at this time. Enjoy the rest of your day. Thank you very much.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].