Coda Octopus Group, Inc.

Good morning and welcome to the COTA Octopus Group's third quarter fiscal 2025 earnings conference call. My name is Melissa and I'll be your operator today. Before this call, COTA Octopus issued its financial results for the third quarter ended July 31st, 2025, including a press release, a copy of which will be furnished in a report filed with the SEC and will be available in the investor relations section of the company's website. Joining us on today's call from COTA Octopus are its Chair and CEO Anne Marie Gale, its Interim CFO Gail Jarden, its President of Technology and Director Blair Cunningham. Following their remarks, we will open the call for questions. Before we begin, Jeff Turner from our Investor Relations team will make a brief introductory statement. Jeff, please go ahead.

Thank you, Operator. Good morning, everyone, and welcome to Coder Octopus third quarter fiscal 2025 earnings conference call. Before management begins their formal remarks, we would like to remind everyone that some statements we're making today may be considered forward-looking statements under securities law and involve a number of risks and uncertainties. As a result, we caution you that there are a number of factors, many of which are beyond our control, which could cause actual results and events to differ materially from those described in the forward-looking statements. For more detailed risks, uncertainties, and assumptions relating to our forward-looking statements, please see the disclosures in our earnings release and public filings made with the Securities and Exchange Commission. We disclaim any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as may be required by law. We refer you to our filings with the Securities and Exchange Commission for detailed disclosures and descriptions of our business, as well as uncertainties and other variable circumstances, including but not limited to risks and uncertainties, identified in our Form 10-K for the year ended October 31, 2024, and Forms 10-Q for the first, second, and third quarters of our fiscal 2025 year. You may get Coder Octopus Securities and Exchange Commission filings free by visiting the SEC website at www.sec.gov. I would like to remind everyone that this call is being recorded and will be made available for replay via a link in the Investor Relations section of the Coder Octopus website. Finally, as a reminder, this is our third quarter fiscal 2025 reporting, and all comparisons, unless explicitly stated otherwise, are with our third quarter fiscal 2024. Now, I will turn the call over to the company's chair and CEO, Anne-Marie Gale. Anne-Marie?

Thanks, Jeff, and good morning, everyone. Thank you for joining us for our third quarter fiscal year 2025 earnings call. Despite the challenging global policy environment, our revenue in the third quarter 2025 increased by 29%, and I believe that we have delivered a solid set of results. For those who are new to the CODA octopus story, our business is made up of three discrete business operations, the marine technology business, the marine engineering businesses, and our recently added acoustic sensors and materials business unit. Within our group, our core business is the marine technology business. This business generates most of our revenue, and in the third quarter, it generated 56.4% of our net revenue. It is around this business that we're building our growth strategy. The marine technology business operates in the subsea market and is home to key disruptive underwater technologies. These technologies are bringing the smartphone revolution underwater by providing a comprehensive real-time information platform which allows our customers to make real-time decisions and also significantly reducing the cost of these operations while increasing safety. The specific addressable markets that we operate in are the imaging sonar market and diving market. It is these market segments that our growth strategy is built around. Turning to our imaging sonar, the Ecoscope. The Ecoscope is a real-time three-dimensional volumetric imaging sonar that can generate real-time three-dimensional images underwater in zero visibility water conditions. This is widely used in the commercial offshore marine market for a range of underwater applications. A significant part of our annual revenue is derived from the commercial offshore marine market. To achieve the growth that shareholders want to see from our company, we have to increase our market share for underwater imaging sensors in the defense space. There are many ongoing defense programs globally where new classes of underwater vehicles are being adopted. Significant budgets are appropriated for this. The Ecoscope's uniqueness of being a single sensor for multiple undersea activities presents a significant advantage over other technologies. It allows the consolidation of multiple sensors into a single power-efficient unit without compromising the various missions to be executed by the customer. We recently launched our next generation of ultra-small form factor three-dimensional sonars, the NanoGen series. The three-dimensional sonars within our NanoGen series are a shade bigger than a smartphone and have been specifically designed for the small class of underwater vehicles, drones, and diver wearable applications. Our second key technology is the David, the diver augmented vision display system. The David provides the real-time information platform for diving operations, increasing safety and efficiency. The addressable market for David includes both the defense and commercial diving sectors. The untethered variant addresses the special forces type of divers and we believe constitutes the largest addressable market for the David technology. Following the successful conclusion of the funded dust hardening program, in the third quarter, we delivered the 16 David-on-Tether system to the Navy for use by the Special Forces. This now allows select group of Special Forces personnel to start evaluating the David technology on live missions. We're providing all support required to ensure the success of this program and the rollout of the technology to the special forces market. We also deliver the final deliverables under the funded David on Tevid system hardening program to the foreign Navy sponsor. This now puts this foreign Navy in a position to start using the technology in live missions. Now turning to third quarter highlights relating to our core business, the marine technology business. This business sells its products and solutions worldwide and increased revenue in the third quarter by 30.7 percent. Key highlights include 57.7% of revenue generated by this business relates to Ecoscope and 42.3% relates to David. Hardware sales increased by 103.6% and were 2.7 million compared to 1.3 in the third quarter 2024. Hardware sales to Asia decreased by approximately 27.9% and were $1.1 million compared to $1.5 million in the third quarter 2024. This resulted in lower commission costs. rental assets were significantly underutilized in the third quarter, resulting in lower units of rentals and associated services. This also impacted on the gross profit margins of this business. This reflects the change in U.S. policy on funding for offshore renewables, which caused many projects to be shelved, as reported by Shell Orsted and BP. Now turning to highlights relating to the marine engineering business. In the third quarter, our marine engineering business revenue decreased by 33.2% caused by delays in receiving contract awards. Gross profit margin in the third quarter 2025 was 58.9% compared to 62.6% in third quarter 2024, which reflects the mix of engineering projects in the period. This business has long-standing relationships with prime defense contractors and has served the defense market for over 48 years. It is reliant on receiving funding on the defense programs. During the third quarter, it continued to see an increase in the level of inquiries on the defense programs. However, many programs are still waiting for funds to be appropriated under the federal budget, and therefore, this affected contract awards to the engineering business in the period. The success of the marine engineering business is predicated on increasing the number of programs to which it supplies proprietary parts. Now turning to highlights relating to the newly acquired business unit, Precision Acoustics Limited. In the third quarter, this newly added business unit contributed 20.6% to our net revenue and 18% to our operating income. This business unit has added some diversification and resilience to our revenue structure. We continue to be very pleased with this acquisition, which we made in October 2024, and reiterate that it positions a group to collectively respond to larger defense requirements, particularly in the underwater acoustic space. We continue to make it our priority to focus on executing against our growth strategy. And in the third quarter, we saw an increase in sales of both Ecoscope and David. Blair Cunningham, our President of Technology, who is the market maker for our technologies, will be updating you on progress and various milestones around our core technologies. Blair will also be available to answer any questions you may have about our technologies, so please use the opportunity to raise such questions during the Q&A sessions if you have any. I will now turn the call over to Blair Cunningham.

Thank you, Anne-Marie, and good morning, everyone. Today, I will focus on progress that we have made around our core technologies, Ecoscope and David. The Ecoscope, our flagship technology, the Ecoscope, continues to represent the largest opportunity for scalable growth, particularly within the defense and security market. This sector is undergoing a transformational shift driven by the increasing deployment of next generation underwater vehicles and platforms, including manned, unmanned, surface, subsurface, and fully autonomous robotic systems. The latest generation of underwater vehicles, including drones, is trending towards smaller form factors, creating newer opportunities in the subsea market. To meet this demand, we've spent the last two years developing a new series of compact, real-time 3D imaging sonars, supported by a significant investment in our next-generation custom technology chipset. This breakthrough IP investment has enabled us to miniaturize our advanced imaging technology for key defense and commercial applications. The first products in this line are now on the market, and I commend our R&D team for their exceptional work in making this possible. Designed to meet the evolving needs of underwater vehicles and platforms in the defense sector, we are excited to report that we have now launched our ultra-compact real-time 3D imaging sonars, the Ecoscope Pipe NanoGen series. These next-generation sonars enable small platforms to enhance situational awareness and consolidate multiple sensors into a single power-efficient unit, delivering both 3D spatial awareness and forward-looking obstacle avoidance. Beyond subsea vehicles, the NanoGen series is also ideal for diver wearable systems, diving platforms, and a wide range of underwater robotics. We've already concluded several successful trials in the quarter with our NanoGen series sonars with key defense customers who are excited about the technology and have started to look at this integration into programs. Looking ahead, I will personally be involved in three additional trials in Q4 with both U.S. and international naval forces. including integration into subsea vehicle platforms and special forces diver systems. This level of engagement reflects the strong market interest we anticipated and validates the strategic importance of this product line. Our ship hull scanning solution, developed under a multi-year funded defense program, received additional funding this quarter, marking a key milestone in the continued validation and deployment of this technology. This expanded investment includes the integration of another variant of our real-time 3D imaging sonar, Ecoscope Pipe SIVS, which is used for close-in inspection missions. The original slide platform has been significantly enhanced to support a wider range of diver missions. In addition to its core application for ship hull scanning, the platform now includes capabilities for infrastructure inspection and seabed mapping, enabled by forward and downward-looking imaging functionality. This expansion follows successful trials and continued confidence from the defense customers. The integration of our SIS close-up visualization sonar has demonstrated exceptional performance in delivering real-time close-range imaging, critical for detailed target detection and conducting complex inspection tasks in confined or challenging underwater environments. A final phase three evaluation is scheduled for October with the original U.S. defense customer, focused on validating the ship hull scanning solution in operational conditions. A second slide system was delivered during the quarter to a foreign Navy as part of a larger David Special Forces Development Program. This international deployment utilizes the same technology platform, including our DAVID, Diver Augmented Vision Display software, and supports CBED and infrastructure mapping applications. These two deployments, now with distinct defense customers, mark a critical transition of our technology from R&D to real-world operational use. We believe our integrated diver slide solution offers the most advanced capability available today for diver-based underwater inspection and mapping. The unmanned underwater vehicle market, valued at $4.8 billion in 2024, is projected to reach $11.1 billion by 2030, driven by the growing complexity of maritime threats and the demand for cost-effective, low-risk technologies. As a result, ROVs, UUVs, and underwater drones are becoming critical components of modern defense strategies worldwide. In general, the Ecoscope currently accounts for approximately 80% of marine technology business revenues. With the launch of the NanoGen series and strong ongoing customer engagement, we are well positioned to capture significant value in the expanding defense and underwater robotics markets. David. The other significant pillar of our growth strategy is the David Diver Augmented Vision Display. a cutting-edge augmented reality technology, purpose-built to enhance diver safety, performance, and situational awareness in low visibility and technically demanding underwater environments. The David Untethered system, which represents the largest growth opportunity for this transformative technology, achieved two critical milestones during the quarter. For context, in the U.S. alone, there are 14,000 divers within the potential community of government and defense users for the Untethered System. Firstly, the initial order of 16 complete David Untethered Systems received in Q1 was successfully delivered in Q3 and is now ready for fleet evaluation by U.S. Special Forces. These systems are the culmination of extensive field testing and direct feedback from operational divers funded under the dust hardening program. The advancement in this specific deployment is the system's seamless integration with the U.S. Navy's Mark 16 underwater breathing apparatus. This integration allows real-time life support data, including system status and alerts, to be projected directly into the David augmented reality head-up display. The second key milestone achieved during the quarter was the completion of all remaining system component deliveries to the foreign Navy sponsor of the dust hardening program. This marks a significant step forward in demonstrating international alignment and growing global interest in our data technology. Together, these milestones validate the technological maturity of both the David tethered and untethered systems and marks a critical inflection point in our trajectory from development and field testing to active fleet evaluation and operational deployment. Importantly, both U.S. and international program partners remain committed to comprehensive fleet evaluations and live mission evaluations throughout the year, underscoring the strategic relevance and near-term potential of our data technology in next-generation underwater operations. In Q3, we received an initial order for David Systems from a major European Navy with extensive diving operations and regional influence, an organization we've been actively supporting. In Q4, I will personally lead our team in supporting this Navy during real-world dive missions in operational waters, deploying our latest David Tether systems alongside the Ecoscope underwater inspection system. a rapid response mobile inspection and mapping platform designed for seamless David integration. Notably, this is the same UIS configuration used by the U.S. Navy Supervisor of Salvage and the U.S. Army Corps of Engineers during the Francis Scott Key Bridge collapse response. This upcoming deployment further underscores the operational maturity and versatility of both the David and Ecoscope UIS technologies, as well as our continued support for frontline military and infrastructure response missions worldwide. Finally, we're pleased to report a significant increase in active development programs centered around our David technology, reflecting strong momentum in expanding David systems capabilities, integrating David with additional platforms, and broadening support across a wider range of operational environments. Among the most notable new programs, David, along with the newly launched Ecoscope Pike Nanogen series, is being integrated into the U.S. Navy's Deep Sea Expeditionary with no decompression or descend system. The Descent system features a lightweight, hardened, atmospheric dive suit designed for extreme underwater missions. The suit incorporates rotating detachable joints to provide divers with increased dexterity, flexibility, and maneuverability in challenging environments. This program is sponsored by the Office of Naval Research in collaboration with three U.S. Department of Defense entities, NAVSEA, NUIC, and NSWC. David is being leveraged as a critical life support and visualization component of the DSEN system, enhancing diver safety and mission effectiveness by delivering real-time life support data via the David head-up display and 3D situational awareness through the compact Ecoscope Pipe Nanogen sonar mounted directly to the DSEN suit. This initiative exemplifies the growing recognition of David and Ecoscope technology as mission-critical tools in the evolving landscape of advanced military diving and underwater operations. We are currently awaiting the outcome of four additional U.S. Department of Defense proposals, all of which are in the final evaluation stages, are anticipated to move forward into immediate execution upon award. Each of these proposed programs focuses on the integration of our David system and Ecoscope sonar technologies with robotics platforms, further expanding our role in the evolution of autonomous and semi-autonomous underwater systems. The timing of these opportunities aligns perfectly with two major recent milestones, the finalization of the David Untethered system and the launch of our new Ecoscope pipe nanogen series. a suite of compact real-time 3D imaging sonars optimized for small and robotic platforms. These pending awards reflect the growing demand for underwater vision and augmented reality technologies in next-generation defense systems, and we are well-positioned to support this strategic shift. I will turn the call over to Anne-Marie, and I will be available to take your questions during the Q&A session.

Thank you, Blair. Let me now turn the call over to our interim CFO, Gail Jardine, to take you through our financials for the third quarter 2025 before I provide my closing remarks.

Gail? Thank you, Anne-Marie, and good morning, everyone. I will now take you through our third quarter fiscal 2025 financial results. For reference, all income statement comparisons are with third quarter fiscal 2024, and all figures are in U.S. dollars. Starting with revenue, in the third quarter of 2025, we recorded total revenue of $7.1 million compared to $5.5 million in the third quarter of 2024, an increase of 29.0%. Our core business, the marine technology business, generated revenue of 4.0 million compared to 3.0 million, representing a 30.7% increase over the third quarter of last year. Our acoustic sensors and materials business, which was added to our group in October 2024, recorded revenue of 1.5 million. Our marine engineering business, or services business, generated revenue of 1.6 million compared to 2.4 million representing a 33.2% decrease over the third quarter of 2024. In summary, our net revenue increased by 29% and the newly added business, Precision Acoustics, added 20.6% to our consolidated revenue in the third quarter of 2025. Moving on to gross profit and margin. In the third quarter of 2025, we generated gross profit of 4.8 million compared to 4.0 million in the third quarter of 2024. Consolidated gross margin was 68.3% versus 73.9% in the third quarter of last year. In our marine technology business, gross margin decreased to 77.0% in the third quarter of 2025, compared to 82.9% in 2024. reflecting the mix of sales with more units of hardware sales compared to rental sales. The acoustic sensors and materials business realized gross margin of 54.8%, a little lower than the previous two quarters, reflecting increased commission costs and mix of sales. Our marine engineering business gross margin decreased to 58.9% in the third quarter of 2025, versus 62.6% in the third quarter of 2024, again reflecting the mix of engineering projects during the third quarter 2025. Now looking at our operating expenses. Total operating expenses for the third quarter of 2025 increased to 3.4 million, compared to 2.7 million in the third quarter of 2024. The main factors for the increase in total operating expenses were the addition of Precision Acoustics Limited into the group, which added 16.0% to these costs. as well as the weakening of the US dollar against the British pound and Danish krona, which impacts costs when translated into US dollars from the base currencies for reporting purposes. Our selling general and administrative costs in the third quarter of 2025 totaled 2.9 million, an increase of 32.8% from 2.2 million in the third quarter of 2024, reflecting the addition of the new business unit to the group as well as the contingent liability accrual for year one earnouts related to the acquisition of Precision Acoustics Limited and exchange rate adjustment charges. As a percentage of revenue, our selling, general and administrative costs for the third quarter of 2025 were 40.6% compared to 39.5% in the third quarter of 2024. Operating income in the third quarter of 2025 was 1.38 million compared to 1.39 million in the third quarter of 2024, a decrease of 0.8%. Operating margin was 19.5% compared to 25.4% in the third quarter of 2024, which we attribute to the increase in cost of revenue and operating expenses for the reasons explained earlier. Pre-tax income in the third quarter of 2025 was 1.5 million, compared to 1.6 million in the third quarter of 2024. Net income after taxes in the third quarter of 2025 was 1.28 million, or 11 cents per diluted share, compared to 1.27 million, also 11 cents per diluted share, in the third quarter of 2024. Focusing now to our balance sheet. As of July 31st, 2025, we had 26.2 million in cash and cash equivalents on hand and no debt. This represents an increase of 3.7 million from October 31st, 2024, with a comparable figure of 22.5 million. Finally, to summarise the financial impact in the current quarter of the introduction of the acoustic sensors and materials business into the group, It contributed 20.6% of revenue and gross profit margin with 0.8 million or 54.8%. That completes my financial summary. So let me turn the call back over to Anne-Marie for her closing remarks. Thank you, Gail.

I'm very pleased with the increase in revenue in the third quarter 2025 and our overall financial results. I'm also pleased with the progress we're making against our key milestones for growing our business. Some of these include the delivery of the 16 David systems for the US Special Forces evaluation. The delivery of the final David deliverables to the foreign Navy sponsor under the funded dust hardening program. We believe the hardening program has been a success and we're starting to see the positive results of this. The launch of our NanoGen series sonars, which together with our existing sonar range puts us in a position to address a sizable portion of the imaging sonar market. The receipt of our first order from a foreign Navy for the David untethered system. This order, which is for two systems, is from a very influential European Navy. We are very pleased with this as we believe this will be the precursor to broader adoption by this influential European Navy. We continue to work to create stable long-term shareholder value and execute against our strategy to grow the business, which is our single biggest priority as a group. In terms of cash deployment, we will continue to prosecute our M&A strategy in fiscal year 2025 and are continuing to build our M&A pipeline. Through our strategy, we aim to pivot the revenue model of the marine technology business to a multi-year, multiple sales model, as we've started to see with David's product line. To conclude, we would like to thank our shareholders for their continued support We're now happy to answer any questions. Operator?

Thank you. If you'd 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'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, it's star one to ask a question. We'll pause a moment to allow for any questions. Our first question comes from the line of Brian Kinslinger with Alliance Global Partners. Please proceed with your question.

Hi, this is Kevin for Brian. Thanks for taking our questions. With the launch of the Ecoscope pipe nanogen series and its trials during the quarter, what type of feedback have you guys received so far?

Blair, would you like to take that, please?

Certainly, Anne-Marie, thank you very much. And thank you again for the question. I think the most striking feedback from all of the customers that have seen the system is the remarkable reduction in form factor, size, and weight, which is critical as we can outline uh for the new vehicles that are coming into the market so really that's been transformational many of these customers are familiar with the Ecoscope performance so that we're delivering the same again but in a much much much smaller form factor so I think everyone is very excited to look for new opportunities of where they can now integrate the Ecoscope into their platforms where perhaps

size or weight perhaps you know you know that that prevented them from doing so uh you know in in previous development organizations and just to like to add to that the descent program which blair cited earlier that's a very very good example of the sonar actually being in a diving suit with our previous generation of sonars that wasn't possible because of the form factor. So really being able to reduce the sonar to the size of almost a smartphone really opens the aperture for you know, our business and the potential for opportunities to expand the opportunities base. So we're very, very excited about this because our previous generation of Sonars, you know, it's a bit bigger, would be locked out of applications like the descent. So opening the aperture and getting more reducing the form factor of the sonar and therefore having the opportunity to broaden the scope of what we can do on smaller vehicles is a seismic move forward for our business.

Great. Thank you. And then congrats on all the progress on the Untethered David program. During the March conference call, you commented the company is targeting 4.5 million in David related revenue. Um, can you talk about what transpired since then that the target and the press release today is, um, 3.5 to 4 million?

Well, we're still, I mean, we think we're going to hit 4 million in, um, dated revenue. So for this fiscal year, which we think it's really, really significant given that, um, last year we did 1.2 million. So, um, still seeing really significant move forward with the David product line. And I feel very, very happy with this year potentially hitting $4 million in revenue, being $1.2 million last year at the same time. So really happy about that.

Great. Thank you.

Thank you. Once again, if you'd like to ask a question, please press star 1 on your telephone keypad. Our next question comes from the line of Richard Deutsch. He's a private investor. Please proceed with your question.

Yes. Thank you for taking my call, and congratulations to your R&D team. Over the past few years, I've followed the progress, and it's vast. In fact, it's one of the hard parts of understanding your company is how many opportunities you have with the technology that you've produced. So I have a few questions, but I'll start off with one. In terms of your exposure to China or countries that we're not looking to do business with, what should we be thinking about in terms of sales opportunities or lost opportunities and also the supply chain in terms of getting critical components, parts, and supplies? That's my first question.

Well, thank you very much, Richard, for that question. In terms of supply chain, we're really not exposed to China at all. So most of our products components are originating mainly from Europe. So we don't really have any exposure in terms of supply chain in China. not significant at all. In terms of selling to China, really, that was an issue from more than five years now that because for the UK government, for example, has made it really difficult to get export licenses to China. So for a long time that market is rather tame for this business due to the barriers to import products into China. So although we have a strong presence in Asia, China is not our biggest target market. Although there are lots of opportunities in China, it's not the biggest target market for our business.

Okay. And one more here on your, uh, technology uh i've been impressed at how superior it appears to be over many years and the developments you keep making just keep pushing that envelope forward but i've been surprised we've had quarter after quarter uh of uh of sales that have not uh really expanded very much so i'd want to know uh is ecoscope still your your main uh short-term revenue driver in terms of uh overall revenues, and why has it taken so long, and what are the impediments or the opportunities short-term in the market? Considering your technological advances, I don't understand why the sales have been not going up faster. Thank you.

Okay, thank you for that question. So just to remind you, in this quarter, the marine technology business sales went up by 30.7%, I believe. And hardware sale components also went up significantly, and I think, yes, by 103.6%. And within that mix, it's mainly Ecoscope and David. So that's the first thing to say. that we do believe that we're making good progress. In the quarter, the disappointing part of our quarter is really about rentals, where rentals have decreased largely because of the shift in funding opportunities for offshore renewables. And while we believe that in the longer run, that will be offset by more projects for oil and gas, it still takes time to spin up a development. So overall, I think that we're making good progress. But really, as I've emphasized over and over, for the business to grow, we do, I mean, a sizable part of our revenue comes from the commercial offshore marine market. The model for that market is different because then often a sale is a single sale or a rental, right? Really, the opportunity for sizable or scalable growth lies in the defense space, and that's a process. It's not an event. I believe we're making all the right progress to get the technology into programs where the technology is being looked at for integration into these broader programs. Last quarter, I did report on some significant findings for some of the defense programs that have evaluated the Ecoscope technology and concluded the Ecoscope is superior in terms of its performance and capabilities. So I do believe we're making progress in really where it matters is the defense market because there, first of all, there's budgets. And then there's opportunity for multiple sales, recurring sales. And that's what we're targeting. And we're starting to see some of that from the David product line where we're seeing the year-in, year-out budget now being appropriated for that line of product with pull-through Ecoscope sales. Overall, I feel the pace is a bit slow, but that is not unusual for programs that they take a longer time in evaluating a technology. And once it's really then adopted, that's when we start seeing the sales that we would like to see. And a critical juncture we've reached in this quarter also is the successful conclusion of the hardening program for the David, where I think that program is two years ago, it started where the whole purpose of that was to deliver prototypes for evaluation by operational divers in the special forces and really getting feedback and refining the technology we have now delivered what we believe is the, uh, refined product for this key market. So I do believe that we're making, um, really good progress against the key milestones that are important for the growth of the business.

Okay. Thank you. And Marie, and just one final question. Um, your, uh, MNA program, um, is, uh, Interesting, but I wonder why we'd like to hear what your thoughts are on the stock buyback program as your company is extremely attractive itself as an M&A target. I'd like to hear what thoughts are about reducing the shares through a stock buyback program. Sorry, I'm not sure what the question is. The question is, what status and thoughts do you have about a stock buyback program for COTA shares?

Well, that's something for our board to think about, and I'll raise that with our board, but really that's really a board decision on stock buyback. So right now I feel very much in terms of our M&A program, we're building a pipeline of opportunities for the business and looking for value-accretive technologies that may be highly complementary to the David product line. That's our thinking on our M&A strategy for the time being.

All right. Thank you. Really stunningly great work that you guys are doing. Looking forward to continuing to follow you. Thank you.

Thank you very much. Thank you.

Thank you. There are no other questions at this time. I'll turn the floor back to Ms. Gale for any final comments. Thank you, Operator. Thank you for attending today's call. Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.