Coda Octopus Group, Inc.

Good morning and welcome to Cota Octopus Group's first quarter fiscal 2026 earnings conference call. My name is Melissa and I will be your operator today. Before this call, Cota Octopus issued its financial results for its first quarter ended January 31st, 2026, including a press release, a copy of which will be furnished in a report filed with SEC and 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, Anne-Marie Gale, its Interim CFO, Gail Jardine, its President of Technology, Blair Cunningham, and Dylan King from their Investor Relations team. Following their remarks, we will open the call for questions. Before we begin, Dylan King from the company's Internal Investor Relations team will make a brief introductory statement. Dylan, please go ahead.

Thank you, Operator. Good morning, everyone. Welcome to Code Octopus's first quarter fiscal 2026 earnings conference call. Before management begins their formal remarks, we'd 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 or 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, the year ended October 31, 2025, and Form 10-Q for the first quarter of our fiscal year 2026. You may get Coda Octopus's Securities and Exchange Commission filings free by visiting the SEC website at www.sec.gov. I would also like to remind everyone that this call is being recorded and will be made available for replay via a link in the investor relations section of Coda Octopus's website. Finally, as a reminder, this is our first quarter fiscal 2026 reporting. In all comparisons, unless explicitly stated otherwise, are with our first quarter fiscal 2025. Now, I will turn the call over to the company's chair and CEO, Anne-Marie Gale. Anne-Marie?

Thanks Dylan and good morning everyone. Thank you for joining us for our first quarter fiscal year 2026 earnings call. Despite the challenging global policy environment, our revenue in the first quarter 2026 increased by 28.8% and I believe that we have delivered a solid set of results. For those who are new to the CODA Oxford story, our business is made up of three discrete business operations. The marine technology business, the defense engineering services business, and our 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 first quarter, 2026, it generated 50% of our consolidated 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 provides vision underwater and allows our customers to make real-time decisions. This technology is a key enabler for the AI-enabled autonomous capability required by the subsea market as it provides real-time 3D perception, enabling these autonomous systems to perceive, navigate, and make decisions independently underwater. This technology reduces the cost of these operations and increases 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 Ecoscoop. The Ettoscope 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 on-the-sea 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. We recently launched our next generation of ultra-small form factor three-dimensional sonars, the Nanogen series, which expands the space of the imaging sonar market we can address large and small payloads. Our second key technology is for David, the Diver Augmented Vision Display System. The David provides a real-time information platform for diving operations, increasing safety and efficiency. The addressable market for the David technology includes both the defense and commercial diving sectors. The untethered David variant addresses the special forces type of divers and we believe constitutes the largest addressable market for the technology. This variant is now going through approved Navy use assessment, and we are hopeful that this will be concluded in our second quarter 2026. Once approved, this paves the way for broader adoption of the David technology by the military diving market. Now turning to first quarter 2026 highlights relating to our core business, the marine technology business. This business sells its products and solutions worldwide and increased revenue in the first quarter 2026 by 47.4%. Key highlights include hardware sales increased by 31% and were 2.3 million compared to 1.7 million in the first quarter 2025, with a strong focus on ecosystem sales from the Asia region. Rental assets utilization improved, increasing rental revenue by 232.8% to approximately 0.7 million compared to approximately 0.2 million in the previous quarter and was a factor in the increase in gross profit margin for this business unit. Now turning to highlights relating to the defense engineering services business. In the first quarter, 2026, our defense engineering services business revenue increased by 9.2%. This business has longstanding relationships with prime defense contractors and has served the defense market for over 48 years. It is reliant on receiving funding under defense programs. Many defense programs are currently being funded through the use of continuing resolutions. In practical terms, this reduces the funding available for many programs, and as such, this business has experienced delays in receiving contract awards. Although a federal budget is in place, line items appropriations are still pending, and this continues to impact our defense engineering services business. Now turning to highlights relating to our acoustic sensors and materials business, this business sells its products and solutions worldwide and increased revenue in the first quarter 2026 by 20.7%. Gross profit margin was higher at 66.8% compared to 61.7%. We continue to be very pleased with the performance of this unit. 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 have about our technologies. I will now turn the call over to Blair Cunningham.