Coda Octopus Group, Inc. (NASDAQ:CODA) Q1 2023 Earnings Call Transcript

Annmarie Gayle: The pairing of the Echoscope with the DAVD and the way we think that will go down for commands is it won’t be a one for one, but certainly there will be a number of Echoscopes that we will introduce with the DAVD because as I had mentioned before, what the sonar data there in that environment, why it’s important. Divers are diving in zero visibility conditions and that’s really the Echoscope that’s going to provide insurance from that.

Brian Kinstlinger: That was really helpful. Last question I have and then get back in the queue. Is there any predictability as to the mix of agent sales versus direct sales, which currently have a little bit of a different margin profile? And then in addition, can you talk €“ are DAVD sales direct or indirect, and what is their impact on gross margin as they become a bigger piece of your business?

Annmarie Gayle: Yes. So just to say, Brian, and one of the things we have emphasized as we pivot from R&D into real hardcore sales and marketing. That necessarily means that we are agnostic where sales come from and we are expanding our agents network globally, including in Asia. So what we really want is more sales. Although what that means then there will be commissions paid on those sales. But then at the same time, if we expand our direct workforce, there’s also that cost, it will not hit margins, but it certainly will be our operating costs. So we think €“ I mean, I can’t give you a projection of what percentage will come, but we’re certainly pushing the boot out to capture all corners of the market globally for our technology.

The DAVD is different, right at this moment we do not see the DAVD being via agents just because of the process of adopting the DAVD. But having said that, for example, helmet suppliers might be good distributors of the technology, and that discussions we have ongoing and in that context, we would pay a commission, but we are not at that point yet.

Brian Kinstlinger: Great. Thank you so much, Annmarie.

Operator: Thank you. At this time, this concludes our question-and-answer session. I’d now like to turn the call back over to Annmarie Gayle.

Annmarie Gayle: Thank you very much everyone for joining today and we look forward to speaking to you again. Thank you very much for your time today.

Operator: Thank you for joining us today for Coda Octopus’ conference call. You may now disconnect.

Annmarie Gayle: Thank you.

Nathan Parker: Thank you.