Coda Octopus Group, Inc. (NASDAQ:CODA) Q2 2023 Earnings Call Transcript

Brian Kinstlinger: Right. I would ask about the DAVD, but you provided so much good detail that I don’t really have any questions about it. So thanks for all your time.

Annmarie Gayle: Thank you very much, Brian. Thank you.

Operator: [Operator Instructions] Our next question comes from the line of Walter Ramsley with R-Squared. Please proceed with your question.

Walter Ramsley: Thank you. Hello, Annmarie. Thanks for all the information. I had a request, I guess, if you could elaborate a little further on the slow performance in Asia. You said the customers are dragging their feet a little bit. Is that because their own business is slowing down or what’s provoking that?

Annmarie Gayle: Well, we don’t have a lot of visibility as to the reason for the slow pace of conversion, either we’re told that projects is just moved a little bit to the right it’s not gone away. So, we don’t have any reason to be concerned, wherein good line of communications with our agent network, with the opportunities that we’re pursuing. And what we’re told is that they’ve just moved to the right. So I can’t give you more color as to the reason, but what I can say is that at this point, I am not alarmed because I believe it’s just a question that the project is pushed out a little bit from the scheduled Q2 to later on in the year.

Walter Ramsley: Okay. And as far as the Echoscopes and the military, I mean, my understanding is that the military around the world is really accelerating development of these underwater drones, essentially, is that the case or are they, kind of not moving as quickly as you would like either?

Annmarie Gayle: Well, it’s — look, the programs that we are really targeting for getting our vehicles embedded in, there’s a lot of front end work, because then if you think of a vehicle being manufactured to the end user requirement, that will take a couple of years. The work that Coda Octopus needs to do is to be part of that front end. It’s a little bit like Tesla. If Tesla is to bring out a new model or vehicle, all the specification for that model is locked down. And when that vehicle is then produced and supplied to the market, it’s the same specification for that model, that’s what we are doing. So the program might take a couple of years, but, really, that is simply what happens when you’ve got new generation of anything.

There’s a prototype phase, then there’s trial phase, then there is production phase. We are doing a lot of prototype or front end work to ensure we are part of that solution. And this is what gives us the confidence that in the future, that we are going to capture more market share because we’re certainly in a number of programs and it doesn’t stop with the five programs that we talked about last year. Every year, this is our laser focus what are the new programs that Coda Octopus technology can get into and we’re having lots of discussions. In fact, one of the things that we had in the U.S. last year and that now is now been launched to the market. And as I said, we have sold a handful of system last year that same program has come back to us for a different program that they’re now developing for a different sonar within our series of sonar.

So we’re getting good repeat opportunities from — first of all, during that front end work, we’re a part of that solution, that solution works for them. They come back to CODA with a good and excellent track record and then we get on to another program. So I feel we’re doing a lot of the right things and really, the impact of those right things, which are the front end work that we’re doing to be part of that story where we’ll start yielding the results, Walter, of next year and onwards. So that’s really what we need to do. So [Multiple Speakers] and at the same time.