Coda Octopus Group Inc

NASDAQ:CODA

Earnings Call Transcript 2024-Q2

[Operator]

Good morning. Welcome to Coda Octopus Group's Second Quarter 2024 Earnings Call. My name is Sherry, and I will be your operator today. Before this call, Coda Octopus issued its financial results for the second quarter 2024 ended April 30, 2024, including a press release, a copy of which will be furnished in a report filed with the SEC. It will be available in the Investor Relations section of the company's website.

Joining us on today's call from Coda Octopus are its Chair and CEO, Annmarie Gayle; its interim CFO, Gayle Jardine. Following their remarks, we will open up the call for questions.

Before we begin, Jeff Turner will make a brief introductory statement. Mr. Turner, please proceed.

[Unknown Attendee]

Thank you, operator. Good morning, everyone. Welcome to Coda Octopus Second Quarter Fiscal 2024 Earnings Conference Call. Before management begins the formal remarks, we would like to remind everyone that some statements we're making today may be considered forward-looking statements under securities law and involve a number of risks and uncertainties. As a result, we caution you that there are a number of factors, many of which are beyond our control, which could cause actual results and events to differ materially from those described in the forward-looking statements.

For more detailed risks, uncertainties and assumptions relating to our forward-looking statements, please see the disclosures in our earnings release and public filings made with the Securities and Exchange Commission. We disclaim any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as may be required by law.

We refer you to our filings, Securities and Exchange Commission for detailed disclosures and descriptions of our business as well as uncertainties and other variable circumstances including, but not limited, the risks and uncertainties identified in our Form 10-K for the year ended October 31, 2023, and Forms 10-Q for the first and second quarter of this fiscal year. You may get Coda Octopus Securities and Exchange Commission filings free by visiting the SEC website at www.sec.gov.

I would also like to remind everyone the call is being recorded and will be made available for replay via a link in the Investor Relations section of Coda Octopus' website.

Now I will turn the call over to the company's Chair and CEO, Annmarie Gayle. Annmarie?

[Annmarie Gayle, executive]

Thanks, Jeff, and good morning, everyone. Thank you for joining us for our second quarter 2024 earnings call. Our revenue in the second quarter 2024 was in line with our second quarter 2023 revenue. Despite serious challenges in the second quarter, we delivered a solid set of results, including -- increasing our operating income, net income and earnings per share.

During the second quarter, we observed a slowdown in the pace of placing orders relating to U.S. defense sector programs caused by the funding gap created by the use of continuing resolutions to fund defense programs instead of a fully funded federal budget. This is not unusual where there is an upcoming presidential election. Notwithstanding these temporary constraints, I am very pleased that we were able to increase our revenue generation outside of the USA, which shows the diversity and resilience in our revenue stream.

The Marine Technology revenue in the second quarter 2024 was broadly in alignment with the second quarter 2023 revenue. I am particularly pleased with increased utilization of our rental assets during the second quarter and therefore, the improved gross profit margins of 80.2% in the second quarter 2024 compared to 75.3% in the second quarter 2023.

We are also very pleased to see better traction in sales emanating from Asia, which were 15.9% higher in the quarter. Sales for this segment from the U.S.A. fell from $1.8 million to $0.6 million as a result of funding gaps created by the use of continuing resolutions to fund defense programs. This means that without a federal budget, there is limited funding for these programs and many of these are currently only partially funded.

Our Engineering business saw an increase in revenue and is making good progress in key areas. This business was also impacted by a reduction in order intake relating to their ongoing defense programs and sales from U.S.A. Defense programs for this segment fell from $1.1 million to $0.8 million. This is due to the funding gaps I touched on earlier.

Moving to our second quarter 2024 overview. During the second quarter of 2024, we continued to make progress against our key growth drivers. As I mentioned, we saw increased traction for our Echoscope rental services. This resulted in an increase in gross profit margins. Although sales in the U.S.A. were significantly down due to the funding gaps releasing to defense programs, our team was able to recover some sales in other geographies. I'm particularly pleased with this as we choose the diversification and resilience within our revenue streams.

Of great importance, we also provided extensive support to the ongoing operations relating to the Francis Scott Key Bridge collapse. The circumstances surrounding the collapse were tragic, and we are pleased that we could have assisted in some small way. This high-profile engagement has reinforced the importance of our technology for these sorts of applications and has marketed by Echoscope's other customers around the world, including in North America.

The Echoscope technology has been the primary sensor used for a broad group of activities relating to recovery, salvage and real-time inspection. This high-profile project again highlighted the importance of the capability of the Echoscope technology, a single sensor for multiple real-time 3D imaging applications, including in disaster recovery programs.

Over the years, the Echoscope has been used globally in many disaster recovery programs, including in South Korea, Japan and Europe. We made further progress with Naval Information Warfare Center, NIWC, and supplied onto a lease agreement, two of our Compact Echoscope's sonars for their ongoing evaluation of our technology for the VideoRay defender platform.

We also continue to work with an allied foreign Navy, which has selected the VideoRay platform on integrating our Echoscope on their vehicles and we have begun to provide training on the Echoscope to their personnel. This is a good indication that the Echoscope technology is included in their sensor selection program.

We also made progress on the ship hull scanning program, which we have been pursuing with our Navy customers. And in the same quarter, we completed successful trials. This ship hull scanning platform, which we delivered to the Navy in our third quarter of 2023 includes both the Echoscope and DAVD capabilities. This is an important step forward under this program which has been executed over a 3-year period and for which we received $1 million in funding [indiscernible].

We're not aware of any effective solutions in the market for ship hull scanning. And if the company's developed solution is accepted by the navy as meeting the requirements of this program, this could be significant for our business. Furthermore, are many different navy commands that are interested in the solution we have put forward.

We also continue to make progress in the adoption of the DAVD Tethered Systems, and in the second quarter, we partnered with a U.S. service provider to complete a tunnel inspection project using the DAVD system and our Echoscope. We believe this was a resounding success as we were able to show the effectiveness of the DAVD and Echoscope solution for these applications, particularly the return on investment for customers and the superior deliverables achievable with this solution.

We are discussing adoption of the technology with this U.S. commercial service provider. We also made good progress in advancing the DAVD untethered system customization and hardening program and received a partial funding of $250,000. We anticipate the remaining $1 million will be released as the budgetary constrains mentioned earlier are removed. Despite this, the program of hardening, the DAVD Untethered System is proceeding and we are doing everything within our limit to move this program to a successful conclusion for the company and its shareholders. We continue to believe that this is the biggest opportunity for the DAVD Technology.

Our newly launched HUB digital audio underwater communication system has been undergoing Navy evaluation. We have now received overridingly positive feedback on the technology from a survey conducted by the Navy of its divers involved in this evaluation. 100% of those involved believe that this product increase their diving capability and level of safety by providing clearer and crisper communications. They all said they would use the product on a mission, if available and thought that it was superior to existing analog communication systems.

We continue to make good progress with our goal of creating the conditions for returning the engineering business to its pre-COVID $10 million revenue profile. To achieve this, we will need to increase the number of new defense programs that we are supplying proprietary subassemblies into. We have now seen some new programs materializing and I'm excited about this.

In the second quarter, we received a partial award of $771,000 for production units for a new subassembly for an existing program of record, which is being upgraded due to obsolescence of some of the components. We had anticipated an initial award of $1.5 million under this program. But due to the funding gaps mentioned earlier, we received a partial award and expect the remainder when funding becomes available. We are excited about this program of upgrade as there are many exiting systems in the field that will need to be upgraded with a new part, which we have designed and this will generate meaningful revenue on this program over time.

We also received a new order for termite mission computers, which relates to a new Navy program. This is for an initial preproduction quantity of 8 systems for a contract value of $280,000. We expect the larger production orders for this program in early 2025.

Finally, we also continue to perform quality business development activities, including working with our newly appointed business development focus group in the U.S. We can already see the promise of the success of this engagement.

Let me now turn the call over to our interim CFO, Gayle Jardine, to take you through our financials before I provide my closing remarks.

[Gayle Jardine, executive]

Thank you, Annmarie, and good morning, everyone. Let me take you through our second quarter 2024 financial results starting with revenue. In the second quarter of 2024, we recorded total revenue of $5.32 million compared to $5.30 million in the second quarter of 2023, an increase of 0.4%. The Marine Technology business products business generated revenue of $3.52 million compared to $3.58 million, a 1.6% decrease from the second quarter of 2023.

Our Marine Engineering business or Services business generated revenue of $1.8 million compared to $1.7 million, an increase of 4.7% from the second quarter of 2023. As discussed earlier, our total consolidated revenue increased in the second quarter by 0.4%. Our Engineering segment revenue increased in the second quarter and the product segment saw an increase in rentals, rental-related support services and an increase in sales outside of the U.S. region, including in our strategic market area of Asia, where outright sales increased by 15.9%.

Sales from North America were down due to the reduction in the defense program funding for the reasons Annmarie explained earlier.

Moving on to gross profit and margin. In the second quarter of 2024, we generated gross profit of $3.7 million compared to $3.6 million in the second quarter of 2023. Consolidated gross margin was 70.2% versus 68.3% in the second quarter of last year.

In our Marine Technology business, gross margin increased to 80.2% in second quarter of 2024 compared to 75.3% in 2023, reflecting changes in the mix of sales primarily due to the increase in rental and the associated support service sales, which have a higher gross margin.

Our Marine Engineering business gross margin decreased to 50.7% in the second quarter of 2024 versus 53.9% in the second quarter of 2023, again reflecting the mix of engineering projects during the second quarter of 2024.

Now moving to our operating expense. Total operating expenses for the second quarter of 2024 decreased to $2.4 million compared to $2.8 million in the second quarter of 2023, which is largely due to the reduction in our stock compensation charges in the period.

Our selling, general and administrative costs in the second quarter of 2024 totaled $1.8 million, a decrease of 17.7% from $2.2 million in the second quarter of 2023. As a percentage of revenue, our selling, general and administrative costs for the second quarter of 2024 were 34.7% compared to 42.3% in the second quarter of 2023. The reduction is mainly due to a decrease in stock compensation charges.

In accordance with our strategy, we continue to recalibrate our working capital towards business development and marketing activities. Accordingly, in our second quarter, marketing expenses increased by approximately 52%. This included the fees relating to the appointment of a business development focus group we hired in the U.S. to assist in this area.

Operating income in the second quarter of 2024 was $1.4 million compared to $0.9 million in the second quarter of 2023, an increase 57.9%. Operating margin was 25.4% compared to 16.1% in the second quarter of 2023, primarily due to the increase in gross profit margin combined with the reduction in total operating expenses.

Income before taxes in the second quarter of 2024 was $1.6 million compared to $1 million in the second quarter of 2023. Net income after taxes in the second quarter of 2024 was $1.4 million or $0.13 per diluted share compared to $1.0 million or $0.09 per diluted share in the second quarter of 2023.

Moving now to our balance sheet. As of April 30, 2024, we had $23.7 million in cash and cash equivalents on hand and no debt. This represents a decrease of $0.7 million from October 31, 2023, where the comparable figure was $24.4 million. This is mostly due to the purchase of long lead time items into inventory. So you will see that line item has increased accordingly. Our working capital increased to $41.0 million from $37.6 million at October 31, 2023.

Now I will turn the call back over to Annmarie for closing remarks. Thank you.

[Annmarie Gayle, executive]

Thank you, Gayle. I want to close by emphasizing that we continue to work to create stable, long-term shareholder value. I want to remind everyone that growth is a process and not an event. Think of it like a puzzle, and we're putting the pieces together.

In the meantime, we're running a profitable business. Our team is doing an outstanding job in maintaining superior margins and profits for our shareholders while all the time seeking to grow sustainably without compromising our track record of a tightly run profitable business.

In the 2024 fiscal year, there are a number of key management goals for our business to achieve with a focus on growth. We have a compelling calendar of prestigious business development activities in 2024 with a focus on the defense applications.

Some of our goals include: continuing to seek to increase the number of programs that our Echoscope technology is embedded in, further prioritize and engage in the DAVD Untethered System customization and hardening program with the goal of securing the technology's adoption by the special forces community in early 2025. Supporting the rollout and adoption of the DAVD Tethered Systems to the market both in the defense and commercial space, supporting the rollout and adoption of the digital audio communication solutions, rebuild the engineering business to its peak of $10 million revenue profile, and we're seeing traction with new programs, which will assist in achieving this goal.

Expanding the group's management team and capabilities, this is ongoing. Continuing to develop our pipeline of candidates on our M&A strategy with the goal of acquiring complementary value-accretive technologies into our portfolio. We continue to believe in the growth prospects and strategy built around our disruptive technologies.

By adopting this strategy, it pivots the revenue model of the Marine Technology business to a multiyear and multiple sale models as we have started to see with a DAVD product line. Though it could take several years for these programs to mature, we continue to believe this is the best strategy for our business's growth prospects. Therefore, we believe that our near-term growth will be incremental but solid.

To conclude, we would like to thank our shareholders for their continued support. We're now happy to answer your questions. Operator?

[Operator]

[Operator Instructions] Our first question is from Brian Kinstlinger with Alliance Global Partners.

[Brian Kinstlinger, analyst]

Annmarie, two quarters ago, you discussed the challenges in both offshore renewables and underwater construction markets that was leading to delays. Some of it was pricing challenges due to inflation. Can you update us actually the state of these markets and how the environment is the same or different today?

[Annmarie Gayle, executive]

Thank you, Brian, very much for that question. So as we saw in the second quarter, we saw really increase in the utilization of our rental assets. And that's largely being driven by offshore renewables programs and projects actually and also on underwater construction activities. So what we're seeing is increased demand for our rental solutions for underwater construction, some of which includes offshore renewables.

[Brian Kinstlinger, analyst]

Great. And then the work you did with the Francis Scott Key Bridge and the headlines of that disaster. How, if at all, have you been able to use that to drive awareness or increased adoption of your technology?

[Annmarie Gayle, executive]

Well, that drove awareness, Brian. Also, I mean, it also was a good reinforcement of the capability of our technology and uniqueness of our technology and what it can deliver. So that was really a good marketing awareness campaign for the business globally. And we've seen tractions coming from that exposure that we've had. So all these things will take time to percolate into firm orders, but we certainly have had some new contracts from that event.

And including also what I'd like to emphasize also, Brian, is that including some of the programs, the defense programs that we've been working on in the U.S. This is just reinforce really their finding and what they're doing and helping to galvanize outcomes on some of these programs. So all in all, really, really good piece of marketing for our business.

[Brian Kinstlinger, analyst]

Great. And then in terms of the DAVD some great news on the tunnel program that you discussed. I'm curious if you see an inflection point in orders for either tethered or untethered systems in the next 12 to 18 months based on this progress you're making?

[Annmarie Gayle, executive]

Yes. So certainly, let's take the tethered system, which, as you know, is in the market. It's on the proved navy use items. And there, what we're seeing is new commands putting in requests or requisitions for acquiring the technology. We know several commands are trying to get budget to do this. So -- but the barrier in this quarter and possibly the next quarter is really where we see defense programs budgets are really limited at the moment. But certainly, we could see strong interest in the DAVD technology.

And more importantly, Brian, when we started, when we did the initial rollout of the DAVD to the Navy, one of the key things we weren't sure of was how they would buy the technology? Would it be just DAVD or would they buy the echoscope also? And I'm pleased to say that they definitely find the echoscope along with the DAVD game casing.

So that will be sold or purchased by them as a pair. So that is very exciting for our business because that is an established group now. And to a large extent, the DAVD tethered system is a passive feel now within the U.S. Navy because it's an approved navy use item. what this business has to do is to continue providing training, working with the different commands, working with the Navy to heighten awareness in its community for the DAVD capability.

And thereafter, I think it will sell itself. So I'm excited about that for the DAVD Tethered Systems for the untethered system, really there that work is ongoing. As you know, we have 8 systems fielded with both the U.S. Navy and the foreign Navy and they're working together to evaluate the system. And even though we have actually been affected by limited funding at the moment.

The program continues to work at pace. We continue with the hardening and in turning over revisions to product to the Navy. So although there is a gap in funding, it is not at all affecting the progress that we're making under these programs.

So coming back, therefore, to the inflection point, I really think that we're seeing good and solid traction in the market for the DAVD technology all around. And I think it will take time for people to adopt the technology, but we are getting close and seeing that the tunnel program that we did in the U.S. really, really important.

We also, in the last quarter sold our first DAVD system in South Korea. I think that they were very, very pleased. Also another very high profile project that they've used the technology on. And they themselves are on the road to adoption. We have several major offshore service providers in Europe, who are still going through their own internal process for the DAVD. So I feel very much that there is -- we're getting closer the recognition of what the technology is capable of, that's growing. And really, it's about now getting people over the line to start putting in their budgets for the technology.

So I think that we'll probably see much more increased demand for the system coming from the U.S. once the budgetary constraints are removed. And also, I am excited about the joint program that we have, both with the U.S. Navy and with the foreign navy because then I think that, that is going very, very well, and we certainly want to get the system in the hands of the special forces using it. They have big budgets and really we're excited about that.

[Brian Kinstlinger, analyst]

Great. Now I think the natural follow-up to that, I heard you mention there maybe one more quarter on the budget side. But if I'm not mistaken, the CR ended at the end of June, have you begun to see a recovery yet slow, not a recovery at all yet on the budget side? Just maybe take us through on the marine and/or engineering services, what's happened since the CR ended?

[Annmarie Gayle, executive]

No, I think it's really the appropriations now. And I think that what we're seeing on programs is that appropriations have not been made to the program. So many programs are still only getting partial budget. I think next point where we will see funding release is in July. That's my understanding in any event for the programs we are working on July is critical because there's going to be a new tranche of fundings to various programs.

So it's -- I think, Brian, it is -- this is not really unusual in an election year. There's all this political environment that's fraught and so this is not a big surprise for business. However, as I said, I expect in July, there will be some funding being released. What I don't certainly have visibility of, is the extent of this funding round for programs like the DAVD, programs like for engineering business that we're waiting for a number of key orders. So I don't have visibility. But what we have consistently seen is a partial funding as opposed to full funding.

[Brian Kinstlinger, analyst]

Got it. Last question for me and then I'll get back in the queue. You mentioned the preproduction order for the thermite program, which is great to see. I know you've been hoping that thermite demand would start to pick up. You mentioned the production could begin in the first quarter of 2025, I think. Can you estimate the size of the opportunity for you on that production program?

[Annmarie Gayle, executive]

Well, the one that we -- where we've got a small initial evaluation system order, my understanding is that, potentially, there will be 200 units under the program for our purchase orders. So we wait to see. But that's the number we are working towards.

[Brian Kinstlinger, analyst]

And can I look at the 8 units delivered in $250,000 as an ARPU? Or is that not accurate?

[Annmarie Gayle, executive]

It's -- no, that's accurate. That's accurate.

[Operator]

[Operator Instructions] Our next question is from Fernando Canto with Private Investor.

[Unknown Attendee]

Annmarie, congratulations on a very good quarter. I just have a question. I see on the first quarter that the unbilled receivables were $763,000, and they went up this quarter to $1.580 million. Is there any explanation for that, please?

[Annmarie Gayle, executive]

Did you say receivables?

[Unknown Attendee]

unbilled receivables.

[Annmarie Gayle, executive]

unbilled receivables. Gayle, can you take that question for us, please?

[Gayle Jardine, executive]

Sure. Yes, basically, it went up from $1.6 million to $1.6 million -- $1.6 million from $0.9 million, and that reflects the increase in our accumulative projects expenses incurred on uncompleted contracts. So it's work that we have done -- we've invested a lot of time and materials in some projects that haven't yet built. So that's why they are on the balance sheet as contracts in progress or unbilled receivables.

[Unknown Attendee]

Right. That's positive for the third quarter?

[Annmarie Gayle, executive]

Yes. I think that just what we said. We saw an increase in our Engineering projects in the second quarter. And in the first quarter, it was really, really off plan. We're seeing that business coming back on plan. And as I mentioned in my first quarter earnings call, we expect a lot of the Engineering businesses revenues to be back loaded and we're seeing that coming through.

[Operator]

Our next question is from Andrew Scott with [indiscernible].

[Unknown Analyst]

Annmarie, great quarter. I know you're probably a little bit frustrated with growth. But I just wanted to remind everybody that you're doing a great job in managing your business. I had a chance to calculate your ROA, your ROE, your return on shareholder equity. And I'd like to challenge everybody else to run the same numbers with other marine-related companies, and you guys are at the top of your peer group. So a great job in running a business.

I heard some of the questions before. So a lot of the comments that I had have been answered. But you have a great balance sheet. You've got ingredients efficiency to grow the company through acquisitions. Are there any verticals, any markets that you're specifically looking at? But again, just a great job in running the business, very exciting.

[Annmarie Gayle, executive]

Thank you very much, Andrew. We are also very, very -- thank you for that. I'm really excited about the business. And it is correct. I mean, it is -- I think also what was for me, very, very positive in the quarter is that we saw challenges. It was a very, very challenging environment for defense programs, but the team was able to pivot and really make up revenues from other jurisdictions and geographies.

And Asia is up by 15.6%. I'm really excited about that because that is the key market for us. So Also, we've launched our digital audio communication system. And whilst that's not a big ticket item, the market is considerable for that technology. And we now know that Navy is moving forward with that product I'm also excited because then this further diversification of our revenues, and it also is a good entry point because it's the same customer base for the DAVD.

So when we're talking to our customers about digital audio and they buy into that technology, cheap and careful at the bottom end, I mean, that is really the entry point to get them to think about the DAVD. So I'm really excited about where we are with the business. And of course, deeply frustrated about the slowdown in government funding, but we're still all the programs that we have, the defense programs, they're moving forward. And I am really, really excited about the prospects for the business in the long term.

[Unknown Analyst]

Yes. That's a big deal. That diversified revenue model, you're shifting away from your traditional and you're diversifying different countries in the revenue group. I think that's a really overlooked fact. I think that's really going to help your business going forward. Yes, I think the next 12 months are going to be very exciting for Coda.

Again, great job in running the business. I know the margins went up, your profits went up. And while you're struggling to get the growth going. Again, I heard you say before, it's for us, not an event. I think you're right, but you and your team are doing a great job. I'm driving bigger numbers to the bottom line. So as a shareholder, we really appreciate that.

[Operator]

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

[William Bremer, analyst]

Fantastic quarter, given many variables that are really -- that you really can't control the budgets. Going back to Brian's commentary on the thermite. If my math is correct, the $200 million, that would equate to about a $7 million order. Is that correct?

[Annmarie Gayle, executive]

Over time. Over time.

[William Bremer, analyst]

Well, that's -- that's fantastic to hear. Fantastic. Also, I wanted you to give us just a little history. You have been utilizing AI for quite some time. Can you give us a little more granularity in terms of how many of your products, you've embedded AI technology too, and you've been such an early adopter in this technology going back, if I may be mistaken, probably at 4 or 5 years. Is that correct?

[Annmarie Gayle, executive]

Well, I think the first AI product was in where we now 2024. I think around 2019 actually was our first AI product actually where that was on our geophysical software range and really what we've done there and we've really changed the market actually. And that product that we have is called sea duct. What it really does, I mean, when you go for an oil and gas instillation and collecting site scan data, really the pre-stage -- predevelopment stage, really what you're looking at the sea bottom, you're saying, what's on the seabed, how many boulders are there.

Geophysicists can take quite a long time just tagging the boulders in the boulder field. And what we've done, we have absolutely used AI to automate that. And our boulder detection product will do -- a geophysicist will probably spend 4 days on something that we have down to 2 hours. So that's the leading product in the market actually. And we have then also pivoted now to our digital audio solution where we're using AI technology mainly on the -- in the sort of helium environment for speech correction of the diver's speech. So when you're in sort of a helium environment, your voice gets old squeaky. So we're really using AI technology, being able to clean that up completely.

[William Bremer, analyst]

Fantastic, fantastic to hear. One thing I'd like you to consider, and I know how busy your team is with all the different end markets you are addressing, and I really appreciate the commentary that you just made. Would it be -- would you and your team be open to having an Investor Day, a Portfolio Management Day and Analyst Day maybe down in Florida where you have a subsidiary to showcase to the capital markets, your underlying technology.

I think that would help get the word out even better that for some of us that have been invested in this company for over 5 years to finally see it to come to a fruition may be a nice offering. Just something to be you in...

[Annmarie Gayle, executive]

Great idea, -- Great, great idea. And we certainly look at that, but great idea.

[William Bremer, analyst]

Thank you, but this is William. I appreciate it.

[Operator]

At this time, this concludes our question-and-answer session. I would now like to turn the call back over to Annmarie Gayle for closing remarks.

[Annmarie Gayle, executive]

Thank you very much for your interest in Coda Octopus. Have a great day and thank you for joining our call today.

[Operator]

Thank you. This will conclude today's conference. Thank you for joining us for Coda Octopus' conference call. You may now disconnect.