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

Walter Ramsley: That sounds correct. Okay. And then just one last question, these new military programs in particular, when they do a bake off on a new program, what’s your success rate? Do you win them all?

Annmarie Gayle: When we do a bake off, what do you mean? I’m not sure I understand what you mean?

Walter Ramsley: Well, they put out a request for bid or whatever it is to get an underwater vision system for their new secret drone. And so you put in your proposal and do other companies put in proposals and do you have a competition and what’s your success rate?

Annmarie Gayle: Well, I don’t know if because the way it works, it’s like a handful of I mean, most of these companies that are doing or producing underwater vehicle for defense market will be your prime defense contractors in the U.S., in Japan, in South Korea. And really, they really have a requirement already that says, and where we win is because they’re looking for real-time 3D imaging sonar technology and the one program knows of the CODA solution and we’re contacted. And also, where we were at the military continuum in Panama City. There was a huge swell around not just the DAVD system but the CODA Echoscope. So there’s a lot of word-of-mouth that this is the only imaging sonar that will meet that brief for imaging in real-time 3D in zero visibility, water conditions.

In fact, yesterday, I saw a paper that was — or the Coda Octopus technology around and that paper was unequivocal that this is the most advanced sonar technology in the market and the most capable and we just saw that yesterday. And, so there is — no it’s not controversial that our technology is the most advanced. And I think that the small number of prime defense contractors that are operating in the space, we’re kind of well known. So it’s not usually a competition for the sensor that they’re integrating in their vehicles. It usually starts with a dialogue that they’re trying to do this within what the details they can provide. And then we answer a series of questions and then we provide them with data sheets and it goes on until they reach the point where they say, okay.

We would like to buy a system for our fees, first fees. So we see very [Technical Difficulty] that we have good connections with the primes and that’s not just in the U.S., in Japan, in South Korea, where for example, on a number of programs in South Korea already, and that we’ve started supplying via sonar into their new vessels. So it’s a small community of users for real-time 3D imaging. And, unfortunately, I mean, unfortunately, rather, CODA is the show in town.