Q2 2024 Nauticus Robotics Inc Earnings Call
Speaker Change: Hello, I'm Jorge Machnizh, and I'm
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Speaker Change: Good day, everyone, and welcome to today's Nauticus Robotics 2024 Q2 earnings call.
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Kristin Moorman: Please note, this call may be recorded. I'll be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Kristin Moorman, Nauticus Special Project Leader. Thank you, and good morning, everyone. Joining me today and participating in the call are John Gibson, CEO and President; Dickie Hay, Interim CFO; Nick Bigney, Outgoing General Counsel; John Flamington, Incoming General Counsel; and other members of our leadership team.
Speaker Change: It is now my pleasure to turn the conference over to Kristin Moorman, Nauticus Special Project Leader.
Kristin Moorman: Thank you, and good morning everyone. Joining me today and participating in the call are John Gibson, CEO and President.
Terav: Vicki Hay, Interim CFO
Speaker Change: Bigney, Outgoing General Counsel, John Flemington, Incoming General Counsel,
Kristin Moorman: On today's call, we will first provide prepared remarks concerning our operations and financial results. Following that, we will answer questions. We have now released our results for the second quarter of 2024, which are available on our website. In addition, today's call is being webcast, and a replay will be available on our website shortly following the conclusion of the call. Please note that comments we make on today's call regarding projections or our expectations for future events are forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations.
Terav: and other members of our leadership team. On today's call, we will first provide prepared remarks concerning our operations and financial results.
Terav: Following that, we will answer questions.
Terav: We have now released our results for the second quarter of 2024, which are available on our website.
Speaker Change: In addition, today's call is being webcast and a replay will be available on our website shortly following the conclusion of the call.
Speaker Change: Please note that comments we make on today's call regarding projections or our expectations for future events are forward-looking statements.
Speaker Change: Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control.
Speaker Change: These risks and uncertainties can cause actual results to differ materially from our current expectations.
John Gibson: We advise listeners to review our earnings release and the risk factors discussed in our filings with the SEC. Also, please refer to the reconciliations provided in our earnings press release, as we may discuss non-GAAP metrics on this call. I will now turn it over to John. Well, thank you, Kristin. Good morning. And thank you for joining us on our conference call today. It's gonna be a short call today.
Speaker Change: We advise listeners to review our earnings release and the risk factors discussed in our filings with the SEC.
Speaker Change: Also, please refer to the reconciliations provided in our earnings press release as we may discuss non-GAAP metrics on this call.
John Gibson: We're currently really focused on the 2025 backlog. And we have opportunities, both commercial and defense work, that are being worked on, and we'll be releasing progress on those contracts as they close. We continue to receive strong support from our existing lenders, as they're converting to debentures, which has the dual impact of reducing our leverage and increasing our market cap. So, thank you to our lenders.
Speaker Change: I will now turn it over to John.
John: Well, thank you, Kristin. Good morning, and thank you for joining us on our conference call today. It's going to be a short call today.
Speaker Change: We're currently really focused on the 2025 backlog, and we have opportunities, both commercial and defense work, that are being worked on, and we'll be press-releasing our progress on those contracts as they close.
Speaker Change: We continue to receive strong support from our existing lenders as they're converting to pitchers, which has the dual impact of reducing our leverage and increasing our market cap. So thank you to our lenders.
John Gibson: We finished phase one for the largest South American deepwater operator and billed and received payment recently. We received a letter also for the completion of a DIU project successfully completed, and we'll send that final bill in Q3. We are planning to go to the Gulf of Mexico with the Aquanaut Mark II vehicle this month and are finalizing requirements to scope work with customers now. Daniel O'Hirehead of operations is going to cover more of that in his second.
Speaker Change: We finished phase one for the largest South American deepwater operator and billed and received payment recently. We received a letter also for the completion of a DIU project, a successful completion, and we'll send that final bill in Q3.
Speaker Change: We're planning to go to the Gulf of Mexico with the Aquanaut Mark II vehicle this month and are finalizing requirements and scope of work with customers now. Daniel, our Head of Operations, is going to cover more of that in his section.
John Gibson: Before we turn to our operational and testing activities, though, I want to update you on our progress with meeting NASDAQ's continuing listing standards. I want to thank our shareholders for approving the reverse split proposal at our June 28th shareholder meeting. This key vote allowed us to perform a reverse split on July 22nd, which has brought our stock price over the $1 minimum bid price required by NASDAQ.
Speaker Change: Before we turn to our operational and testing activities, though I want to update you on our progress with meeting NASDAX Continuing Listing Standards.
Speaker Change: I want to thank our shareholders for approving the reverse split proposal at our June 28th shareholder meeting. This key vote allowed us to perform a reverse split on July 22nd, which has brought our stock price over the $1 minimum bid price required by NASDAQ.
Daniel Dayhart: We are continuing to work with NASDAQ on our plan to meet the market capitalization requirement and have engaged advisors who are experts in NASDAQ hearings and extensions. Now, with that, I'm going to turn the call over to Daniel Dayhart, our field operations leader, to give you an update on our operations.
Speaker Change: We are continuing to work when NASDAQ on her plan to meet the market capitalization requirement. And I think he aged at Bowser's who are experts in NASDAQ hearings and extensions.
Daniel DeHart: Now with that, I'm going to turn the call over to Daniel Dayhart, our field operations leader, to give you an update on our operations. Daniel. Thank you, John . Let me bring you up to date on the Aqueduct Mark II vehicle.
Daniel Dayhart: Thank you, John. Let me bring you up to date on the Ocranaut Mark II vehicle. We have partnered with Florida Atlantic University this summer to test our vehicle so we can more efficiently progress the technology towards commercial applications. The FAU campus, located near Fort Lauderdale, Florida, is extremely cost-effective and provides access to a university that has immense knowledge of AUD technology.
Daniel DeHart: We have partnered with Tordat Wanniff University this summer to test our vehicle, so we can more occasionally progress the technology towards commercial application.
Speaker Change: The FAU campus located near Fort Lauderdale, Florida is extremely cost effective and provides access to a campus that has immense knowledge of AUV technology.
Daniel Dayhart: This location has provided the ideal setup to develop the Aquinox system in a controlled environment and is easily accessible to open water and off the coast of these. We have completed survey missions with integrated sensor implementation, begun leak detection testing to satisfy an existing contract, and continued testing obstacle collision avoidance. We are mobilizing Vehicle 2 from FAU to return to the Gulf of Mexico and plan to deliver Vehicle 1 to FAU for testing during Q3.
Speaker Change: This location has provided the ideal setup to develop the aqueduct system in a controlled environment and is easily accessible to open water off the coast of East Florida.
Speaker Change: We have completed survey missions with integrated sensor implementation, began leak detection testing to satisfy an existing contract, and continued testing obstacle collision avoidance movements.
Speaker Change: We are mobilizing Vehicle 2 from FAU to return to the Gulf of Mexico and plan to deliver Vehicle 1 to FAU for testing during Q4.
Daniel Dayhart: We are currently on schedule to mobilize back onto the vessel in August to begin the field application of the Aquanaut vehicle to complete a general field inspection of the oil and gas facilities. We are committed to completing the project safely and efficiently. We are eager to introduce the market to supervised autonomy and believe it is the first step to increase commercial activity.
Speaker Change: We are currently on schedule to mobilize back onto the vessel in August to begin the field application of the Aquanaut vehicle to complete a general field inspection of the oil and gas subsea structure.
Speaker Change: We are committed to completing the project safely and efficiently. We are eager to introduce the market to supervised autonomy and believe it is the first step to increased commercial activity. I'll now turn it back over to John.
John Gibson: I'll now turn it back over to John. Thank you, Daniel. We're really excited to be headed back to the Gulf of Mexico this month and look forward to revenue-generating work while we're there. Now I would like to turn the call over to Vicki to discuss our financial... Thank you, John, and good morning. I mentioned earlier that a 36 to 1 reverse split was completed on July 22nd.
John: Thank you, Daniel. We're really excited to be headed back to the Gulf of Mexico this month and look forward to revenue generating work while we're there.
John: Now I'd like to turn the call over to Vicki to discuss our financial results.
Vicki: Thank you John and good morning. As John mentioned earlier, the 36 to 1 reverse split was completed on July the 22nd.
Vicki: All references in our 10Q and press releases in regard to equity and related items are now stated on a post-split basis.
Victoria Hay: All references in our 10Q and press releases in regard to equity and related items are now stated on a post-split basis. I will now discuss in more detail our financial results for the second quarter. Revenue for the second quarter was $500,000, which is the same as the first quarter of 2024 and down $600,000 from the same period last year. Revenue recognized in the second quarter is primarily related to our work with the largest South American depot operator.
Vicki: I will now discuss in more detail our financial results for the second quarter.
Speaker Change: Revenue for the second quarter was $500,000, which is the same as the first quarter 2024, and down $600,000 from the same period last year.
Speaker Change: Revenue recognized in the second quarter is primarily related to our work with the largest South American deepwater operator.
Victoria Hay: Operating expenses for the second quarter were $6.5 million, which is a $1.5 million decrease from Q223 and a sequential increase of $0.5 million. Notably, the second quarter results include a $0.5 million expense for a loss on contract which will be incurred in Q3-24, while Q1 benefited from a $2.5 million expense for a loss on contract that was recognized in Q4-23 as part of our percentage of completion accounting. The net loss for the quarter was $5.4 million.
Speaker Change: Operating expenses for the second quarter were $6.5 million.
Speaker Change: which is a $1.5 million decrease from Q2-23 and a sequential increase of $0.5 million.
Speaker Change: Notably, the second quarter results include a $0.5 million expense for a loss on contract which will be incurred in Q3-24.
Speaker Change: Our Q1 benefited from a $2.5 million expense for loss on contracts that was recognized in Q4-23 as part of our percentage of completion accounting.
Victoria Hay: $5. This is a $26 million reduction from the second quarter of 2023 and a $4.9 million increase sequentially. The large variants between the periods primarily relate to a non-cash $29 million change in fair value of outstanding warrants in Q4-23 versus a $4.4 million non-cash change in fair value of warrants in Q2-21, which adjusted that loss for the first quarter with $8.9 million compared to $7.4 million for the higher quarter and 6.8 million in the same period last year.
Speaker Change: Net loss for the quarter was $5.4 million.
Speaker Change: This is a 26 million dollar reduction from the second quarter of 23 and a 4.9 million dollar increase sequentially
Speaker Change: The large variance between the periods primarily relate to non-cash $29 million change in fair value about outstanding morons in Q420 Greece, Senses of 4.4 million non-cash change in fair value of morons in Q2204.
Speaker Change: I just did net loss for the first quarter. It was $8.9 million compared to $7.4 million for the prior quarter.
Victoria Hay: The first quarter benefited from the Q420 career growth of $2.5 million, relating to the loss-making contracts that otherwise would have hit in the few months. DNA costs for the first quarter were $3.2 million, which is a decrease of $2.3 million from $2.24 million.
Speaker Change: and $6.8 million in the same period prior year.
Speaker Change: The first quarter benefited from the Q2, Q4, 20 career growth, $2.5 million, relating to the last making contract that otherwise would have hit in a Q124.
Speaker Change: G&A costs for the first quarter were $3.2 million, which is a decrease of $2.3 million compared to the same period of 23, and a $0.2 million decrease from Q1-24.
Victoria Hay: We are actively working to reduce DNA costs as we continue throughout 2020. Cash at the end of Q224 was $8.1 million, compared to 0.7 million at the end of 23 23.
Speaker Change: We are actively working to reduce G&A costs as we continue throughout 2024.
Speaker Change: Cash at the end of Q2-24 was $8.1 million.
Victoria Hay: This is a result of funding received in January of $13.3 million, along with raising $9.5 million to our at-the-market facility in the second quarter. During the second quarter, we moved our DRICs out of health for sale back to PPE, as we now have the DRICs working on a revenue-generating contract that started in July. Additionally, we have made an offer on a hydrogen op vessel which has been inheld to sail since December 23. This is expected to close prior to the end of the third quarter of 2024.
Speaker Change: on page 0.7 million at the end of 23.
Speaker Change: This is a result of funding received in January of $13.3 million, along with raising $9.5 million to our at-the-market facility in the second quarter.
Speaker Change: During the second quarter, we moved our DRICs out of health for sales back to PPE as we now have the DRICs working on a revenue generating contract that started in July .
Speaker Change: Additionally, we have assigned offer on a hydrogen op vessel which has been inheld for sale since December 23. This is expected to close prior to the end of the third quarter of 2024.
John Gibson: I will now pass the call back to John Dobson. Nicholas Bigney, Well, thank you, Vicki. Before opening it up for questions, I just wanted to take a few moments to address one more matter. As you may have seen from our public filings, Nick Bigney will be leaving us at the end of this week.
Speaker Change: I will now pass the call back to John.
John: Well, thank you, Vicki. Before opening it up for questions, I just wanted to take a few moments to address one more matter. As you may have seen from our public filings, Nick Bigney will be leaving us at the end of this week.
John Gibson: When I came over to Nauticus, I reached out to Nick to help me, and I happened to catch him between jobs, and he was willing to come over and put us on the right track here. I'm incredibly grateful to Nick. He's been a good friend, a good sounding board, and a good commercial mind. And we've enjoyed having him here, and we're incredibly pleased that Nick, because of the good relationship we have and what he sees in the company, has agreed to stay on and transition to our new general counsel, who I'll introduce in just a moment. Nick, any comments you'd like to make? Thanks for the kind words, John, and I'm incredibly grateful for my time here. I'm leaving with some real mixed emotions.
Speaker Change: Thanks for watching, see you in the next video, bye!
Speaker Change: When I came over to Nauticus, I reached out to Nick to help me.
Speaker Change: and I happened to catch him between job options. He was willing to come over and put us on the right track here. I'm incredibly grateful to Nick. He's been a good friend, a good sounding board, and a good commercial mind.
Speaker Change: And we've enjoyed having him here, and we're incredibly pleased that Nick, because of the relationship we have and what he sees in the company, has agreed to stay on and transition to our new General Counsel, who I'll introduce in just a moment. Nick, any comments you'd like to make?
Nick: Thanks for the kind words, John , and I'm incredibly grateful for my time here. I'm leaving with some real mixed emotions.
Nick Bigney: I'm a big believer in Nauticus's technology, its potential, and its future, but moreover, the leadership team. John has been a mentor and friend for many years now, and it's been a pleasure to work with him, and I believe in the direction the team is setting here. Nauticus is really fortunate to have John Symington coming in as the incoming General Counsel. He's very experienced.
Nick: I'm a big believer in Nauticus' technology, its potential, and its future, but moreover, the leadership team. John has been a mentor and friend for many years now, and it's been a pleasure to work with him, and I'm a believer in the direction the team's setting here.
Speaker Change: Nauticus is really fortunate to have John Symington coming in as the incoming General Counsel. He's very experienced.
Speaker Change: He's a legal leader with expertise in FCC and NASDAQ matters and we've been fortunate enough to have a hand over this week.
Speaker Change: to make this transition as seamless as possible. I'll continue to watch and support Nauticus closely from the sidelines as a shareholder and cheerleader, and I've agreed to make myself available through the coming months to the entire team here to make sure that it's as seamless as possible and we don't have a gap in institutional knowledge.
Nick Bigney: He's a legal leader with expertise in SEC and NASDAQ matters, and we've been fortunate enough to have a handover this week to make this transition as seamless as possible. I'll continue to watch and support Nauticus closely from the sidelines as a shareholder and cheerleader, and I've agreed to make myself available through the coming months to the entire team here to make sure that it's as seamless as possible and we don't have a gap. Nick, thank you. And I really appreciate what you've done here. And now, I thought, "Good, I'd like to introduce John Simon."
Nick: Nick, thank you and...
John Simon: John, why don't you introduce yourself? Thank you, John. I am delighted to be here. And I look forward to helping this team grow. I believe my experiences with growth and transformation at other companies will be helpful to me. And I believe we really have a rare chance to provide something new and different for our customers here at Nauticus. It's an exciting place to be. Well, John, it's good to have you here.
Nick: I really appreciate what you've done here and now I thought, good, I'd like to introduce John Simon. John, why don't you introduce yourself?
John Simon: Well, thank you, John . I am delighted to be here, and I look forward to helping this team grow the company. I believe my experiences with growth and transformation at other companies will be helpful to me here, and I believe we really have a rare chance to provide something new and different for our customers here at Nauticus.
John Simon: I do think that, you know, John joining really emphasizes the fact that we've got a great plan and a great mission. John's quality talent could be anywhere he chose to be here. A strong NASDAQ resume, really strong background with large companies, and successful ones.
John Simon: It's an exciting place to be.
Speaker Change: Well, John , it's good to have you here. I do think that, you know, John joining really emphasizes the fact that we've got a great plan and a great mission. John's quality talent could be anywhere he chose to be here. A strong NASDAQ
Speaker Change: Resume, really strong background with large companies and successful ones. And I'm delighted to have John on board. With that, I'd like to just open it up for any questions, if there are any. And so I'll turn it back to you, Operator.
John Gibson: And I'm delighted to have John on board. With that, I'd like to just open it up for any questions if there are any, and so I'll turn it back to you, operator. Thank you. At this time, if you would like to ask a question, please press star one on your telephone keypad. To withdraw yourself from the queue, you may press star two.
Operator: Again, that is star number one to ask a question. One moment while we queue, and once again, that is star number one to ask a question. We'll take a question from Robert Mandrala. Your line is open. Good morning. Yeah, the question was around what's the current market cap and the number of outstanding shares? Total, that would be... You know, available to the public and then those with health inside. So this is Nick, I can answer that for you've got roughly about 4.6 million in the market market cap of approximately, About 11, I think, on just without standing, with the ventures converting the real true market gap of the company's closer to about 40 to 50, very based on the data in the show. Okay, so the market cap is closer to 40 to 50 million. Is that my understanding? Not on a fully diluted basis; that's correct.
Speaker Change: Thank you. At this time, if you would like to ask a question, please press star 1 now on your telephone keypad. To withdraw yourself from the queue, you may press star 2. Again, that is star 1 to ask a question. One moment while we queue.
Speaker Change: And once again, that is star one to ask a question.
Nick Bigney: Okay, so does that meet the NASDAQ requirement? We're working with them on that. They will look at certain criteria, but yes, we think we have a path forward there. Okay, very good. And then the other question I had was on revenue.
Speaker Change: We'll take a question from Robert Mandrala. Your line is open.
Speaker Change: Good morning. Yeah, the question was around what's the current market cap and the number of outstanding shares?
Toro: Total, that would be-
Speaker Change: You know, available to float to the public and then those held inside.
Speaker Change: So this is Nick, I can answer that for you. You've got roughly about 4.6 million in the market, market caps of approximately one.
Speaker Change: about 11 I think on just what's outstanding with the ventures converting the real true market cap of the companies closer to about 40 to 50 very based on the data in the share price.
Speaker Change: Okay, so the market cap is closer to 40 to 50 million? Is that my understanding? On a fully diluted basis, that's correct.
Speaker Change: Okay, so does that meet then the NASDAQ requirement?
Speaker Change: We're working with them on that. They will look at certain criteria but yes, we think we have a path forward there
John Gibson: I noted in some of the prior press releases that for one of the AUVs, the daily rate would be about $25,000 to about $75,000. Is that a pretty set schedule for revenue? In other words, once it's deployed, is that revenue for five to seven days a week? Could you provide a little more color on that, please? Well, I've got Daniel here, too, who can fill in or correct me on which is one required. When we say 25 to 75,000, that's really an all-end price to the customer, which includes the consumables, the default, the vessels, and the vessels. If we have to have an ROV, that would be built in as well.
Speaker Change: Okay, very good. And then, the other question I have was on revenue. I noted in some of the prior press release that...
Speaker Change: for one of the AUVs, the daily rate would be about $25,000 to about $75,000. Is that a pretty set schedule for revenue? In other words, you know, once...
Speaker Change: Once it's deployed, can we count on that revenue for five to seven days a week or could you provide a little more color on that please?
Speaker Change: Well, I've got Daniel here, too, who can fill in or correct me, whichever one's required. We say $25,000 to $75,000.
Speaker Change: That's really an all-air drive to the customer, which includes the consumables, the diesel on the vessels, the vessels.
Daniel DeHart: If we have to have an ROV, that would be built in as well.
Daniel DeHart: And as we're going through this transition to full autonomy, we're likely to be carrying an ROV for some customers because they're going to want the verification of the performance of the aquanauts.
Speaker Change: More of a transition to full autonomy, they won't sort of supervise autonomy.
Speaker Change: And so when you look at that, it's the field, you sort of break out the vessels, the consumables, the technical sort of small ROV and the astronauts. I'd say here the Gulf Mexico, we would be modeling 200 days a year.
Speaker Change: for work. Due to weather losses and storms, one thing and another. Internationally, it would be the same. It just happens to be the flip season, so it's summertime in South America when it's wintertime here.
Speaker Change: And the day rates in non-U.S. work are higher.
John Gibson: But that doesn't mean the margin is getting higher. You have a very similar margin; it's just that you're going to be running at a higher day rate. But that's the right numbers until the model 200 days a year and, as a whole, if we go into 26, 27, is that you're operating vehicles in the Gulf of Mexico during the good weather for the Gulf, and you're in the northern hemisphere, and then when there is bad weather in the northern hemisphere, you're in this other hemisphere with our videos.
Speaker Change: But that doesn't mean the margin's any higher. You have very similar margins that you're going to be running at a higher pay rate.
Speaker Change: But that's the right numbers, and so the model 200 days a year, and I hope if we go into 26, 27, is that you're operating vehicles in the Gulf of Mexico during the good weather in the Gulf.
Speaker Change: You're in the Northern Hemisphere, and then in the bad weather for the Northern Hemisphere, you're in the Southern Hemisphere, whatever it is. So, we're looking at trying to get in a full year, but you are going to lose weather next.
John Gibson: So we're looking at trying to get the end of the full year, but you are going to lose weather today. Now I understand so that the Thank you. So the other vehicle that's being tested at FAU, I guess set to deploy sometime in Q4. Would that be on a similar type of daily per diem charge?
Speaker Change: 9% so the thank you. So the the other vehicle that's being tested at FAU, I guess said to deploy sometime in Q4, would that be on a similar type of a daily upper DM charge.
Daniel Dayhart: So, great question, Robert. The one we have at FAU now is actually Vehicle 2 that was in the Gulf of Mexico. It's just about ready to be put back in the box and carried back to the Gulf. So it'll come over to Fort Bucon and be deployed this month. Vehicle 1 is the one that we're working on here and assembling in the shop.
Speaker Change: So, great question, Robert. The one we have at SIU now is actually Vehicle 2 that was in the Gulf of Mexico.
Speaker Change: It's just about ready to be put back into boxes and carried back to the Gulf, so it'll come over to Fort Buton and go out this month.
Speaker Change: The vehicle one is the one that we're working on here and have assembled in the shop.
Daniel Dayhart: It will replace Vehicle 2 at FAU, and we'll do the certification, testing, and trials there in the Atlantic. And then we are working on contracts for that vehicle. It will leave from there and go
Speaker Change: It will replace Vehicle 2 at FAU, and we'll do the certification and testing and trials there in the Atlantic, and then we are working on contracts for that vehicle. It will leave from there and go, and we should complete, we should get it there.
Daniel Dayhart: And we should complete, we should get it there, and begin all the certification this year so that we would have that vehicle available to us next year for revenue. And then we'll begin assembling Vehicle 3 in the first quarter of 2025. So, imagine, one week's not going in the next week, two weeks back to the Gulf, the Chase Revenue, one will go from here to SAU, and then with the third one will be assembled starting in a few more minutes. Okay, very good. And then, let me ask you a quick question about Toolkit.
Speaker Change: and begin all the certifications this year so that we would have that vehicle available to us next year for revenue. And then we'll begin assembling vehicle three in the first quarter of 2025.
Speaker Change: and so it's a magic. One we've got now going in the next week. Back to the Gulf, Chase Revene. One we'll go from here to FAU and then with the third one we'll be a simple starting 21 next year.
John Gibson: I know that's kind of an industry game changer. How are you looking for revenue there? What can we expect as Toolkit is more and more adopted and rolled out to the industry?
Speaker Change: Okay, very good. And then let me ask a quick question on Toolkit. I know that's kind of a industry game changer. How are you looking for revenue there? What could we expect as Toolkit is more and more adopted and rolled out to the industry?
John Gibson: You could be a director here, Robert. It's an excellent question. We're very excited about Toolkit. We had a breakthrough this week. One of the things that we do with Toolkit is we simulate Toolkit, and our simulation had been slow, and so we weren't getting in the number of runs that we wanted. And so we had one of our developers here, an outstanding young man, come in and modified our sim work so that we were able to increase it by an order of magnitude in speed. That's significant in our ability to test the software without having to have a vehicle in the water, and it performs almost identically to when the vehicle is in the water.
Speaker Change: Your questions are, you could be a director here, Robert, it's an excellent question. We're very excited about Toolkit. We had a breakthrough this week. One of the things that we do with Toolkit is we simulate Toolkit.
Speaker Change: and our simulation has been...
Benzlo: Benzlo, and so we weren't getting in the number of her runs that we wanted.
Benzlo: And so we had one of our developers here outstanding young man came in and modified our stem work so that we were able to increase it by over a magnitude of speed. That's significant in our ability to test the software without having to have a vehicle in the water. And it performs almost identically to the vehicle when the vehicles in the water.
John Gibson: We are working with an ROV company right now that's excited about deploying Toolkit on their ROVs, and we're working through the contract for working with them, and I think that's a press release and a discussion that we'll be able to have in the very near future. I think the software itself is going to be, I think, the core of the company if we look out in future years because you're able to move that so much more quickly than you are the vehicles themselves. It's higher margin, and it requires lower capital, and faster delivery capability, and so we're focused on making that a commercial product.
Benzlo: We are working with an ROV company right now that's excited about deploying toolkits on their ROVs, and we're working through the contract.
Benzlo: in working with them. And I think that's a press release and a discussion that we'll be able to have in the very near future. I think the software itself is is going to be I think the core of the company if we look out and
Benzlo: and future years because you're able to move that so much more quickly.
Benzlo: then you are the vehicles themselves, it's higher margin and it's a lower capital faster degree capability and so we're focused on making that a commercial product. Back to have with me the gentleman doing that. Here's Jason, would you want to make any comments on?
John Gibson: In fact, I have with me the gentleman doing that here. Jason, would you want to make any comments on that? I think we've been engaging a lot with oil and gas operators, service companies who go and acquire data using ROBs as well as ROB manufacturers and providers, and, as John mentioned, we have quite a lot of interest from all the different parties and we're looking forward to taking, I think that's a wonderful pivot. I agree with the AI in the software. It's a great revenue stream, and as you mentioned, it can be rolled out very efficiently and effectively fairly easily, while the other part of the equation I would say there's no pivot here without that toolkit.
Jason: Yeah, I think we've been engaging a lot with oil and gas operators.
Jason: Service companies who go in a choir to get a using ROVs, as well as ROV name factors and providers. And as John mentioned, we have quite a lot of interest with all of the different parties and we're looking forward to taking those partnerships forward.
Speaker Change: I think that's a wonderful pivot. I agree with the AI and the software. It's a great revenue stream. And as you mentioned, it's
Speaker Change: It can be rolled out very efficiently and effectively, fairly easily.
John: Well, the other part of the business, I would say there's no pivot here without that toolkit. We can't operate the vehicle. It's just that the vision of the company when it started to be platform agnostic and be able to run on anything is facilitating us looking to others.
John: to really help them springboard their operations and get them going and us taking care of the testing and the certification of the system itself. It's a good exciting opportunity for them, but no pivot, we must have to get in order to operate aquanaut, so it's just fundamental in core to our business.
John Gibson: I probably need to jump to another question, Robert, but you feel free to call anytime. I really appreciate your insights into the company. Operator, do we have another one? Anybody else in the queue? We do. We'll take our next question from John Mannion of Geneva Enterprises. Hey, John, how are you doing? So far, so good. I'm just a regular retail investor in this stock, but I had a few questions. Well, not really a few, but just one primarily.
John: I probably need to jump to another question, Robert, but you feel free to call any time. I really appreciate your insights in the company.
John: Operator, do we have another...
Speaker Change: Anybody else in the queue? We do. We'll take our next question from John Mannion of Geneva Enterprises.
Speaker Change: Hey John , how you doing?
John: Good, so far.
John Manion: So I'm just a regular retail investor in this stock, but I had a few questions.
Operator: I know back in 2022, you guys announced a contract bid with the Marines, and I think it was through the IUD program specifically for defense contracting. Is there anything else coming down the pipeline in regards to that specific contract, any movement, or any updates that you can provide in terms of development, cost, revenue, you know, anything relating to that contract specifically? And is there anything in the future that you're looking towards to build on for defense contracting and so on and so forth with regard to, obviously, the IUD?
John Manion: Well, not really a few, but just one primarily. I know back in 2022, you guys announced a contract bid with the Marines, and I think it was through the IUD program specifically for defense contracting. Is there anything else coming down the pipeline in regards to that specific contract? Any movement?
Speaker Change: or any updates that you can provide in terms of development, cost, revenue, you know, anything relating to that contract specifically in it, is there anything in the future that you're looking towards to build on for a defense contracting and so on and so forth with some.
Speaker Change: regard to obviously the EUV.
John Gibson: Okay, so it's another excellent question. And I'm sitting here looking at my new general counsel, and he's shaking his head about saying anything. We're trying hard not to give any sort of forward-looking statements till we get everything closed, but we are actively negotiating on a potential defense contract right now. And I use all of those waffle words because until we have ink on it, I'm prone not to try to make promises at this point.
Speaker Change: Okay, so it's another excellent question.
Speaker Change: and I'm sitting here looking at my new General Council and he's shaking my head about saying anything. We're trying hard not to give any sort of forward-looking statements till we get everything closed, but we are.
Speaker Change: Actively negotiating on a potential defense contract right now, and I use all of those waffle words, because until we have ink on it, I'm prone not to try to make promises at this point. It looks extremely good that this person, they're all going technically and commercially.
Speaker Change: And so, as soon as we have something that is concrete, then we'll get a press release out to you on that. But a right thing to say is, extremely interested in defense work and pursuing that, and believe that we'll have information on that for you as we go forward.
John Gibson: So, thank you very much for your time. You're quite welcome. Operator, do we have any more calls? We have no further questions at this time.
Speaker Change: awesome that was that was the main question that I had so thank you very much for your time
Speaker Change: You're quite welcome.
John Gibson: I'd be happy to return the call to John Gibson for closing comments. Thank you. We're excited about the company, and we're excited to have John join us. We're excited about the work we're about to go do in the Gulf of Mexico now for customers. We've got calls later today to work on how we're going to execute that. We have some really good partnerships that are developing with other service providers, and I think, you know, we're in that crucible where we're at an inflection point, and we're working to turn the corner. It's not it's not that point where I can really say much, but I think all of the indicators are there that we're on the right track.
Operator: Operator, do we have any more calls? We have no further questions at this time. I'd be happy to return the call to John Gibson for closing comments.
John Gibson: Thank you.
Speaker Change: We're excited about the company. We're excited to have John join. We're excited about the work we're about to go do.
Speaker Change: and in the Gulf of Mexico now for customers. We've got calls later today working on how we're going to execute that.
Speaker Change: We have some really good partnerships that are developing with other service providers. And I think, you know, we're at that crucible where we're at an inflection point and we're working to turn the corner. It's not.
John Symington: It's not that point where I can really say much, but I think all of the indicators are there that we're on the right track. We have the right vehicle. We have the right operating system. We've got the right team in place here. We've augmented the team with another real professional in John Symington joining us, so we won't lose any momentum.
John Symington: And we look forward to trying to create wealth for everybody involved in Nauticus, including our employees and our shareholders and our lenders. So we just, and we want to do a great job for customers. And I think that's how you build a fantastic company and just stick with us. This is.
John Symington: We're right there at that point where I think we're about to come through the inflection point for the company. Appreciate you guys. Take care.
Speaker Change: This does conclude today's program. You may now disconnect your lines, and everyone have a great day.
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Unknown Speaker: .. .. .. .. .. .. .. .. .. .. ... Brian Dobson, Nicholas Bigney, John Gibson, John Gibson, John Gibson, Martin Luther King Jr. Director, John Gibson, Nauticus Robotic, Nauticus Robotic, Nauticus Robotic, Nauticus, O-O-O-O-O Brian Dobson, Nicholas Bigney, John, Brian Dobson, Nicholas Bigney,.
Unknown Executive: Brian Dobson, Nicholas Bigney, John Gibson, I'm, Please stand by, your program is about to begin. If you need assistance during today's conference, please press star zero. Good day, everyone, and welcome to today's Nauticus Robotics 2024 Q2 Earnings Call. At this time, all participants are in a listen-only mode.
John Gibson: And as we're going through this transit to full autonomy, we're likely to be carrying an ROV for some staff members because they're going to want verification that the performance of the astronauts is more of a transition to the full autonomy they want to provide to the economy. And so when you look at that bill, you sort of break out the vessels, the consumables, the potential for a small ROV, and the astronauts.
John Gibson: It looks extremely good that discussions are ongoing technically and commercially. And so as soon as we have something that is concrete, then we'll get a press release out to you on that. But the right thing to say is that we are extremely interested in defense and pursuing that.
John Gibson: We can't operate the vehicle; just the vision of the company when it started to be platform agnostic and able to run on anything is facilitating us looking to others to really help them springboard their operations and get them going, and us taking care of the testing and the certification of the system itself. It's a good, exciting opportunity for us, but no pivot, we must have to get in order to operate off or not, so it's just fundamental and core to our business.
John Gibson: We have the right vehicle. We have the right operating system. We've got the right team in place here. We've augmented the team with another real professional, John Simonton, joining us, and so we won't lose any momentum, and we look forward to trying to create wealth for everybody involved in Nauticus, including our employees, our shareholders, and our lenders, so we just, and we want to do a great job for customers, and I think that's how you build a fantastic company. We're right there at that point where I think we're about to come through an inflection point for the company.
John Gibson: And believe that we'll have information on that for you as we go forward. Awesome. That was the main question that I had.
John Gibson: I'd say here in the Gulf of Mexico, we would be modeling 200 days a year for work. They're due to weather losses and storms, one thing and another. Internally, to be disfamed, it just has to be the fluke season, so it's summer time in South America with winter time here, and the day rates in non-US work are higher.
John Gibson: I appreciate you guys. Thank you. This does conclude today's program. You may now disconnect your lines, and everyone have a great day. John Gibson, Nicholas Bigney, and Seymour Frideric Handel's Bassoon Concerto.