NYSE American, and we have with us, CEO Philipp Stratmann, and we're gonna be focused today on really about the growth opportunity in the company as we look through the commercialization side, as we transition to the next stage of the company. So welcome, Philipp. Hey, Shawn. Hey, good morning. Good to be on. Appreciate you taking the time for the chat today. Great, and I also wanna make sure investors know you can access our research and other, and other reports and fireside chats podcasts on OPT at our website as well. It is an open access format at www.watertowerresearch, so I'd encourage you to go there, check out the other research, and also look for any disclaimers and additional information there. So I'd refer you to that, and I'm gonna jump into it if you're ready, Philipp. Yeah, I'm ready, Shawn. Let's go. Good. Good. So obviously, you know, the company's evolved over the years, moved from, you know, ocean applications and into, you know, defense and different uses of the buoys. But one of the things that has been really noticeable to me, having followed the company for several years, is the move towards commercialization out of an R&D project, and really now into getting larger scale deployments and developing the business. And, you know, along with that maturity comes the need for some investments and understanding, you know, how you're gonna service commercial contracts, for example. So I think to start, you know, if you could talk about some of the things that are demonstrating that commercialization to begin with. You had a large number of press releases out and activity lately over the last few months, so things are clearly picking up. But how do you tie those to the commercialization of the projects and the technology, and then get into a little about the investments? No, you're entirely right, Shawn. I think the last couple of months have been very exciting, you know. We've been pleased to be able to tell the market about the progress we've made. We obviously went out and made statements last calendar year where we said, you know, we've, you know, substantially completed all of our R&D activities. You know, we had a pretty decent, steady drumbeat of vehicle orders and demonstrations we were doing. I think what you've seen over the past, you know, couple of months and the last few weeks is really an uptick in not just the, you know, products and projects and general commercial news we're putting out, but also the type of customers and the type of solutions we're bringing. You look at a couple of them, it's not a, "We're gonna do a demo project with somebody." It is a case of, "Hey, we are going to go and provide, you know, X vehicles to a commercial customer in a specific region." You know, I'll talk about regions with you shortly, but it's not new vehicles. It is, you know, it's our existing WAM-V 16, or it's our existing WAM-V 22, or in some instances, the WAM-V 8. And where it's changed is customers aren't going, "Ooh, I'm interested in this vehicle. I'd like to test the vehicle." It is, "Love the vehicle, seen it work in the market, but can you put A, B, or C sensor onto it?" So it's a real step change from where we were. It is us providing an integrated package because nobody questions the ability anymore in the market, whether these vehicles work. It's a case of, you know, they expect them to work. They know they work, and what they're looking for us to do now is to provide them with a modified off-the-shelf offering, essentially, where the vehicle comes off the shelf, but then we modify the sensor packages for their specific application, deliver it to them. We're also now starting to deliver it to them with, you know, kind of like spares, because they're going to be using it properly as, for them, a revenue-generating asset. And then very excitedly, I think the same thing is also now happening on the buoys. Talked about, we're doing some buoy work with, you know, various parts of the U.S. Government. I think now the fact that we are selling a buoy with Maritime Domain Awareness Solution integrated onto it into the Middle East, I think again, that is a step change. It is similar to the vehicle side. It's not a, "Hey, does this buoy work? And, you know, can you provide it to me for a couple of weeks or a couple of months, and I'd like to try it out?" It's a case of, "Okay, I've seen the demos," "I know what your software does because I've dialed into the software," and, you know, myself and members of my team, we've traveled around certain, you know, parts of the world and remotely demonstrating the software capabilities from the assets we have deployed here off the coast of New Jersey and New York. They're also not doubting the buoy capabilities. So we are now at a stage where we are providing, "Here's the buoys. They can look like this, this, or this. Here's the vehicles. Here's the various software packages." And you'll recall we went out and we said we essentially have this Merrows package under which we grouped all of this. This is what this is. So these are commercial offerings based on existing products and solutions that we have, where it is now modifications to the solution as opposed to modifications on the underlying platform. And I think that's very exciting because that is testament to the fact that the R&D efforts that were done in the past are now yielding results, and you're seeing that uptick in the curve. So that's, I think that's a very exciting stage of the commercialization effort. And one of the things you've done to get there is I know you've made investments in sales, too, and I think it's worth talking a little bit about that because obviously, this to touch on what the sales cycle looks like for you so investors understand, you know, how you've gotten to where you are and also the growth path going forward, the investment in sales, you know, starting point obviously to increase the deployments. Yeah, so there's several things we've done. One is obviously we retooled our sales team so that we have the appropriate commercial team for the markets, regions, and industries that we're going after. Right? So as an entity that does a lot of work with the U.S. government, does a lot of work in defense and security, you know, it's important to have the right mix of, you know, veterans, U.S. citizens, you know, people with clearance, and so on and so forth on your team so that you can deliver on that side. But the other thing that you need, and what we did, is, you know, we built out some demonstration assets. You know, we've been very clear on the fact that, you know, we've demonstrated the capabilities and deployed some of the systems using the capital that we had available, and done, you know, had buoys deployed off the coast of New Jersey. So instead of... What that enabled us to do is when a customer says, "Hey, I'd like to see it," we're like: "Great, do you wanna do it this afternoon, or do you wanna do tomorrow morning?" It's no longer a case of like, you know, say, four, five years ago, when work was being done with Premier Oil in the North Sea, it's like they would like to test it. Okay, well, then you have to go and prep it, and you have to ship it over to the United Kingdom, and you have to install it. You know, you're talking months and months and months of work. Where now, or we have been in a position where now somebody wants to see it, we're like: "Great, we'll dial you into it, we log you into it, we're..." You know, and we move on with it. And when that is done, it's. You know, you've seen that frequency of announcements from us change, and that's been largely driven by the fact that we've been able to demonstrate more quickly what we can do. And, you know, things like us signing the OEM agreement with Teledyne, that we went public with, enables us to more effectively integrate sensor packages into the solutions, and that's what customers are really looking for. They're not looking for the underlying platform. They're looking for, "I've got this data problem, I've got this survey problem, or I've got this defense and security problem." And by having this integration capability, you know, we're shortening the sales cycle, and we're materially increasing the pace at which we're converting, you know, opportunities in the pipeline down into backlog and then subsequently into revenues. One of the things that's always been interesting about companies like this, when I've looked at how technology evolves and the adoption curve for something like this, is that light bulbs start to go off, and other people look at it and say, "Oh, I could use it for this," or, "I could use it for that." I mean, obviously, you start with some core basic uses and instrumentation stacks and the things that you're having, but are you seeing more opportunities coming your way that are designed around, "Hey, we could use it for this. Let's take a look at that as a potential application? Yes, we are. You know, we're starting to see more interest, let's say, from the offshore wind industry, you know, as an example. You know, we didn't set out to be a company that does particularly a lot of, you know. We're not mammal-tracking experts, you know, let's say, the right whale on the East Coast of the United States. But the work we've done on defense and security and working with underwater sensors and underwater listening, mostly related to things like anti-submarine warfare, are directly translatable into listening for whales that are migrating up and down the coast and, you know, that you wanna protect as you're going to build out offshore energy assets. So we're starting to see inbound interest coming into us, as opposed to us being specifically positioned in that market, per se. You know, similar things are happening. You know, we went out there, and we said, "Hey," you know, we obviously did the work in Bahrain with the U.S. Navy's Fifth Fleet and Task Force 59, and Digital Horizon. Then we started looking at, okay, what other efforts have we got? So we'd moved into mine countermeasures. So we did the demonstrations earlier this year around Sea-Air-Space, where we deployed, you know, sonar systems behind WAM-V 22 in order to work on mine countermeasures. That has then led to kind of discussions that we're having around, you know, counter UUV capabilities, underwater vehicles. Because the systems we're deploying and the way we are able to deploy them because of our underlying platforms, enables us to spot, you know, kind of micro AUVs in the water, which then becomes the next opportunity. So you're entirely right. It's like, you know, it's like the branches on a tree. You know, once it starts growing, there's a whole myriad of other opportunities that start coming along that we weren't able to capture when, you know, it was a buoy and a type of vehicle. Whereas now, we are showcasing this integration capability exists. You know, we see that acceleration of the demand and the inbound interest. And one of the other things you know, you see companies facing, as they commercialize, challenges that they face, is the sales. How do you sell it? Which I think we talked a little bit about already. But then the next logical is, okay, how do you manufacture it? Can you build it? Can you build enough of it, and can you support it in the field? So those are two very important parts of a commercialization strategy for, you know, especially for smaller companies. How are you addressing those issues? Yeah, I mean, part of it has been, you know, we, we've been public about this, is, is retooling the makeup of the employee base. We had to do that. You know, you can't... as we're moving into operations, we need more operators. So we are putting more stuff out, we need more assembly technicians. You know, we need maintenance. So that, that's something that we've worked very hard on. And, you know, it's, it's come with a, a shift in the makeup of headcount and, you know, adjustments to headcount where required. At the same time, we've been very cautious about where we expand. You know, it'd be easy for us to kind of spend every weekend or every week traveling to different parts of the planet and working on sales opportunities, but you're gonna lose sales opportunities more quickly if you don't deliver then not getting them in the first place. So we've been very targeted on focusing on North America initially, 'cause that's our home market. And then we started expanding into Latin America, and now we started pushing into the Middle East. We take very concerted steps, and in all of those areas, we look for the appropriate partners that we can work with, that can help us with in-country or in-region deployment, in-country maintenance and services. 'Cause nobody's got a vehicle, you know, let's say in the Middle East, that's gonna ship it back every time they want some maintenance done back to California or to the East Coast. So you have to find the appropriate partners, so you have to set it up accordingly. I think those are critical steps to go through. In terms of manufacturing and assembly, you know, to the other part of your question, we see ourselves as an assembly partner. You know, we lead the design, and we will do the final assembly, but at our core, we're not a manufacturer. You know, we don't go and build out from scratch every single part or sub-assembly that's required to put together our systems. You know, we have a very strong made-in-America supply chain that we benefit from, and we use that supply chain to procure sub-assemblies, partially assembled systems, that we then do the final work, and we do all the integration and factory acceptance testing at our sites, and then move it to the customer. I think that keeps us agile. Just on that last point, you know, it is important to note, we've gone through a lot of effort to make sure that we have a, you know, as fully a made-in-America supply chain as we possibly have, given our customer base. When you're going to the customers, or they're coming to you in some cases now, obviously, you know, recurring revenue is something that's always at the top of my mind and as an investor, 'cause we, you know, an analyst, we love that. We love recurring revenue. So, as you're building out the business and the growth strategy, how are you addressing, you know, the equipment sales or maybe not sales? It's obviously you're renting the space, recurring revenue. Talk about that mix and the strategy, and what, if any, specific investments you need to support with the recurring revenue or service, Energy-as-a-Service strategy, that you, that you're implementing. Yeah, so obviously, you know, we still sell systems to our customer base, and, you know, the sales are what get us the foothold in a certain market segment. You know, they're great for kind of rapidly scaling up total quantum revenues that we're going after. But then, you know, we went public with the fact that we launched a, you know, properly tiered service support system, essentially, to our customers and an offering to our customers. So that they can pick, going, "Hey, here's the kind of support I need." And it goes from, "I just wanna be able to call somebody between, like, normal time, Pacific or Eastern or wherever I'm based," to, "Well, I wanna be able to call somebody all the time, and it needs to be on the times in the region that I'm in," to, "Well, I don't just wanna be able to call somebody, but I would need- I need some set of spares," To, "Well, I need spares, and I need a train-the-trainer approach, and I need you to come out once or twice a year to train my team on, you know, the next set of, you know, equipment and tools and processes." And you'll see that with our customers, you know, we now issue frequent field service bulletins. So when we learn something in the field about how something works or where a remedial action needs to be taken, we'll issue that to the customers. So it becomes more of an ongoing service. Obviously, that helps drive that recurring revenue over time. You know, so you're looking at build up the installed base, then provide recurring services on that installed base, and then you're always going to have additional sort of lease customers that don't wanna own it. They just know that, "Hey, for the next three years, here's what I need to do during every maintenance season." And that's great. We'll work on that, too. You know, obviously, the latter requires a fleet to be available. You know, the services requires us to have the available spare parts. Doing the servicing requires us to have the people with the right skill sets in the right location. So, you know, those are some of the costs that we do have, but I think they're more than compensated for in the way that we're able to convert those into revenues. So as CEO, when you think about, you know, the growth opportunities in front of you, what, what gives you the most heartburn, I think, or maybe let's call it the bottlenecks that you think of as you grow the business, that you really are focusing on to make sure they go smoothly? I think the big challenge, and it's—I think it's a good challenge to have, is the fact that, kind of, industry in general, the offshore industry in general, is really waking up to offshore autonomy. And there's a mindset that's shifting and changing that we're seeing. You know, when you're looking at things like the Department of Defense's efforts around Replicator, when you're looking at the efforts around, you know, kind of what DIU is doing, the defense innovation. When you're seeing, you know, the great partnerships we've managed to build with, you know, Sulmara and some of our other partners. When you're seeing the global expansion that we're looking at, you know, Middle East, Latin America, parts of sub-Saharan Africa, it is, it is being able to maintain the quality of product and have the customers being happy with the systems they have and with, you know, minimum downtime, if any. I think that, that's what's going to be the next challenge. Obviously, we are constantly concerned, I'm constantly concerned about more growth, you know, more revenues and, you know, more gross profit, and so on and so forth. But we can't take our eye on maintaining quality, safety, and overall reliability of what we provide, because otherwise, you know, it's gonna get challenging, you know, delivering the growth in revenues that we've seen recently. I'd imagine some of the security and DoD applications, you know, uptime is, and reliability is very high importance, I assume, correct? Well, it's not just reliability on that side, Shawn, it's also, you know, it's having the right people available. T he right qualifications and the right backgrounds. You know, in certain projects that we're on, you know, we can't disclose contractual terms. We can't disclose the exact counterparty who we're dealing with. It's. And that's just something, I think that's just part of the nature of one of the, you know, industries that we're in. But you know, we're proud and humbled to continue supporting our war fighters and all of our allies who utilize autonomous systems. So, you know, I have to talk a little bit about profitability targets when you get there. I mean, obviously, the company's reached the inflection point in commercialization. How does the economic model build out for you? Obviously, we touched a little bit on recurring revenue, very important factor for you, I think for, you know, for all investors to note. But how do you see the economic stack for you as you grow the business here? Well, if you look at, you know, obviously, we've got our next earnings call next week. But if you look at what we did in the first three quarters of our fiscal 2024, you know, you saw that steady rise and then stabilization of our gross profit margin at or above 50%. You know, I think, I mean, that, that, that's obviously key. You know, being able to deliver gross profitable revenues and then growing them, is what's going to enable us to deliver that pathway to profitability that we laid out, and, you know, we're envisaging, you know, during calendar 2025. And maintaining, you know, now that we've materially stopped, ceased our R&D activities, is keeping that... Those tight control on costs that we have implemented and are further implementing right now, you know, keeping those controlled, is then what enables us to go and make the entire thing profitable over the long term, and then lead it on to profitable growth. Do you think your growth curve will be lumpy? You know, this is something else that you kind of face as companies start hitting those growth strides, where you have, you know, a big quarter, then a slow quarter. And I guess one of the things I've always thought of when I think of anything related to DOD, for example, or government contracts, they tend to be lumpy. You know, it takes a while sometimes to get them through, then you have a big chunk. Do you think your business is gonna look like that? Or do you think through diversification and how some of the, you know, some of the markets you're approaching, that it'll be a smoother path than what maybe we traditionally see for, you know, defense-related companies? I think it will be smoother, but we're obviously still beholden to certain seasonal aspects. Government contracting is government contracting. Government, the congressional year, congressional budget year, is very different to the tax year. It's very different to our fiscal year. So we're always going to see periods of time, quarters in our case, where there is less, and then we're gonna see periods where it is much higher. That's just going to happen. Equally, in the offshore industry, there's also some form of seasonality in offshore operations. You know, people do inspection, repair, and maintenance during certain times of the year. They do drilling activities during other times. They do offshore construction during certain times of the year. So we're going to see higher quarters that are in the run-up to these kind of events taking place, because that's when we do most of our work, and then you're gonna see some lower quarters. You know, there'll be times when they'll balance each other out, and there'll be times when they might amplify each other. So, but generally speaking, what we try and do is, what we like about the diversification of the streams isn't necessarily just a focus on, you know, the lumpiness or the seasonality, but it's the fact that it means if one thing isn't doing so well, then you can be able to benefit from something else in the economy. And, you know, trying to find some form of vague countercyclical nature, I think is important. So, we do have several questions from the audience, and we have a little bit of time, so I'm just gonna take a couple of those, so they get a chance to participate here. I would like to get them involved, if possible. One of the questions, an interesting topic is, on the defense side and expanding beyond U.S. Government, right? How would contracts work and growth work for other governments, other countries, or is this going to be limited to, you know, to, is there any exclusivity, I think is what they're getting at, with the U.S. Government? Obviously, we follow all, you know, export controls or whatever other restrictions are put in place that we need to adhere to. You know, we work closely with a lot of our allies around the world. There will inevitably be countries that we don't work with or where we won't work. I think what you'll see is that, you know, there's a slight difference. There'll be a more military-focused type system, you know, really defense within the U.S., and it might be more of a security-focused system as we're going overseas. You know, yes, we will work, obviously, you know, we'll work through the U.S. government to the extent that that is possible, you know, be that through the various mechanisms that are in place to support our allies... And when, in instances where we work directly with other countries' establishments, we'll make sure that, you know, we can work in those areas, we've got the appropriate clearances in place. And if we're starting to go into various regions, and we've been public about this, you know, for certain places, we will sign exclusive agreements with, you know, overseas defense contractors that have a strong link to the country or region where we're working in, that can help us navigate how it works over there, and that are also companies that are cleared for us to work with through the U.S. Government. Right, the next question is regarding spending. And, you know, I think, I think what they're getting at is, how much more investment do you need to make, you know, to realize the revenue targets and the growth that you put out? And I think we've talked about this a little bit, but, you know, spending money on growth versus, you know, kind of keeping the lights on or developing a technology. So, you know, focusing on where the spend opportunities are that create the ROIs for you. Yeah, and I think what you'll start seeing over the course of, you know, our current fiscal year, is that material shift in our spend profile. And what we do spend is really focused on operations, assembly, delivery, and integration type work. You know, we are not focusing on any material R&D efforts. And really what we're focusing on is kind of, you know, kind of, call it sustaining engineering, you know, maintenance engineering, those kind of efforts. You know, the efforts that are required for us to maintain the high quality that our customers are expecting when we deliver. And I think that will start leading to a material shift in the spend profile that you're seeing. And I'm gonna take one more question, and it's really more of a crystal ball question, so I'm not sure if you can answer it, but they're trying to understand... It's a good question. Understand the mix of the business. If you look out a couple of years between defense, let's say, and commercial, be it oil and gas or wind, and I know, I know there are a lot of variabilities there, but if you, if you, maybe, maybe if I can ask you, how would you like it to look in a couple of years as you see the growth trends coming out now? Well, if you're looking at where we are and where we're heading, I think it's, you know, just slightly more than 50/50 in favor of, you know, government defense slash- let's call it defense and security work, as opposed to government. I think we are going to continue seeing that trend. But that is not to say that offshore energy, be that wind, or oil and gas, or LNG, or pipelines, or infrastructure in general, doesn't maintain a very healthy margin of our portfolio. What is important to note, though, is that even within that segment, a lot of the work we're doing is around security. You know, it's kind of safeguarding offshore energy assets or, you know, monitoring, you know, or providing vessel traffic management solutions. So there is an industry aspect, which is, you know, defense, security, and offshore energy, but there is a service offering, and even within offshore energy, a lot of that offering is based around providing security services. So I think, you know, I think we'll see—we'll continue seeing a, you know, more than the majority being on defense and security in general. But we are, you know, we're small and we're agile, and we'll be ready to adjust as and when is required if we're seeing the market signal shift. Great. We're coming up on the half hour, so again, I wanna thank all of the investors and participants today. Really appreciate, appreciate you joining us. I apologize, we had several questions we weren't able to get to. You can email me or the company; we'll try to get, get your questions answered. But as a reminder, you can also access research on OPTT and others at www.watertowerresearch. And with that, I'm gonna hand it over to you, Philipp, for any closing, closing remarks, and then we'll wrap it up today at the half hour. Yeah, as we said, it's an exciting time, and we're seeing that ongoing commercial effort paying off. We are really starting to see that traction that we've been looking for in the market, it be that through inbound signals, or be that through efforts that we have generated through our outbound efforts. The fact that we have commercially available platforms that can be adapted to various solutions that we can provide through the integration of commercially off-the-shelf available sensors and other technologies, is just going to accelerate that growth profile that we've been exhibiting in the market. So we're very excited about, you know, the fiscal year that we're in now, and where we're looking at as we move through into 2025 and beyond. Great, thanks. We look forward to talking to you next week on the earnings call. Are the details out for that yet, Philipp? Can people ask- Yes, they are, yeah. Okay. Our earnings call is next week on Friday. Okay, great. And if you can access that on the company's website for information, if you'd like to listen to that. And I'll be speaking to you next week on the conference call. Thank you, everybody. A great audience today. And, and again, good luck with everything. Great story, Philipp, and hope to have you back soon. Great. Thanks, Shawn. Thank you.