Philipp Stratmann, CEO of Ocean Power Technologies. With that, welcome, Philipp. This—it's great to host you on this—on this call. You recently shipped a—a bunch of devices, a bunch of PowerBuoys. Can you talk about, you know, what's happening there and how it kind of, you know, what was the process like, and, you know, that led to the final shipment? Yeah, absolutely. And, Kunal, good to be on. Yeah, it's been a bit—it's been a busy couple of weeks for us. You know, and we look forward to continuing that level of activity as we, you know, progress and keep on driving the company towards growth. You know, we recently announced, you know, shipment of a buoy that's going for an international customer. And that's the follow-on of some previous announcement that we've made of us teaming with an international defense contractor to look at opportunities for persistent ocean intelligence, surveillance, and reconnaissance devices. And we also announced recently that we shipped one of our vehicles that has been equipped with extended over-the-horizon capabilities to do, you know, survey work and other domain awareness activities. And that's moved to the Indo-Pacific region. Again, that's kind of the progression and follow-on from previous announcements related, you know, to that vehicle and that capability that we've been developing. I think what it shows is that ongoing progression that we've been talking about, that move from, you know, we are working on a capability, and we go into teaming and partnering with somebody, then we convert that into sea trialing that capability, and ultimately you start shipping. What we look forward to in the future is that those shipments, in turn, then lead to additional provision of systems and solutions and services that we then provide either, you know, to that customer directly or to other customers that operate in that field. That's great. You know, before we actually, you know, go ahead with the rest of the stuff, just, you know, diving deeper into this in terms of, like, timeline, how do you envisage the timeline from, like, you know, so this was the first step, maybe not the first step, but, you know, this was the culmination of a number of different steps. What are the next steps that we should think of, and what could the timeline be? Yeah. In this case, obviously, you know, these are going to international customers. There's going to be, you know, a month and a bit of shipping. Then when it gets there, you've got customs clearance. We then send one of our team over to, you know, do ready and make ready and get the system put back into service for the customer in the region that they're operating in. It will operate for, you know, a period of time. That could be a couple of weeks. It could be a couple of months. What we've seen in the past is that that then usually converts fairly quickly into, "Hey, I really like this capability and the solution you've given me. I would like, you know, say for the sake of argument, two or three more. Right now, but I'm going to take two or three more, and can I take them on a one-year call-off? We then get them ready for them. We put them in service for them. We provide them. You know, we do it on essentially a bit of a lease or a lease-to-own type provision. That gives you—you know, so there's like a quarter or two before you get—after the initial system is in, before you get to the next stage. There is a bit of a delivery timeline after that. What you start seeing is that constant ramping up. You go from a conversation to a demo to a first in service, and then it starts escalating rapidly. I think where we've seen that timeline shrink is where we have been able to demonstrate that capability, through our own test beds and, you know, capital we've set aside for inventory and demonstration fleet capabilities on buoys and on vehicles. Then invite customers to go and see those demonstrations of the capabilities. That can sometimes bypass that initial step of like, "Hey, I would like to try out one," because they've seen one, and then it becomes a case of, "Okay, great. I've seen the capability. Let me move forward." Obviously, that's a little bit more capital-intensive because it requires us to set aside working capital in order to run these demo and test side ourselves. Of course. Of course. So, you know, for somebody that might have, you know, been introduced to Ocean Power maybe three or four years ago prior to you becoming the CEO, you are a very different company now. It is more intelligence and data rather than the power and the energy itself. Talk about that transformation and what capabilities have you kind of added over a period of time? Yeah. I think it's a great question. It's, you know, this is something we're very proud of, of the pivot that we performed from where the company was. We essentially took what was the underlying hardware that the original buoy business, that OPT was, you know, attempting to scale up, had and looked around and said, "Where are actual gaps in the market when it comes to ocean technology and ocean markets?" On the buoy side, we thought, "It's permanent and resident ISR," so intelligence, surveillance, and reconnaissance. It is also, in a future where USVs and autonomous vehicles—and we've seen this in the aerial domain—are becoming a lot more prevalent, somehow all these USVs need to communicate with each other. They need to start having, you know, they need to recharge. You know, you think about EVs on interstates. EVs wouldn't work if you didn't have charging stations. You start—we started thinking about the buoy as, "Here's your offshore charging station. It's your offshore refueling station. It's your offshore communication station." If you don't have any USVs, it can also tell you what's going on 24/7 for lengthy periods of time. That then also led us to acquiring the USV capability. You know, that got us into that business. Where OPT is nowadays, it is a provider of resident, persistent, and autonomous roaming ocean intelligence platforms that can do subsea monitoring. They can do surface monitoring. They can act as communications nodes. They can act in combination with each other, or they can be standalone. They can service the defense and security sector, but they can also service the offshore energy sector writ large. There is obviously part of that where that falls into the, you know, offshore environmental monitoring types of solutions. Although I'd say that's the smallest part of our pipeline. That is really where we are now. I think comparatively, you know, OPT is not a company in its form that it is now that we've turned it into that is involved in building offshore waveforms. It is a company that is involved in providing non-grid connected ocean intelligence solutions so that it can go and deliver data to customers in a format that they care about. Got it. Got it. You touched upon a number of different things, and I definitely want to go into each one of them kind of in different questions. When you think of defense and when you think of homeland security, and that has been in a lot of focus post the, you know, the war in Ukraine started and, you know, and the change in administration, can you talk about where you kind of fit in the overall defense homeland security kind of a landscape? What is the differentiation that you bring into the whole process? Yeah. There are multiple pockets where we fit into. You know, I think I would caveat all of this that I'd say, yes, I think from a general public's perspective, I think the war in Ukraine has really helped amplify to the public that this sort of autonomous warfare is now happening offshore. I would say it's a problem that I think within the United States and within some of our allies, we've known about for a while and we're preparing for a while. You know, there is a reason why U.S. Navy through 5th Fleet used to have Task Force 59, which was operating out of Bahrain. That was probably almost three years ago. We had several of our vehicles and one of our buoys over there for that first incarnation of those systems. Where we sit is in that overall maritime domain awareness. What's happening between seabed and, you know, in the sky, but not quite space. You know, I think that's anything that happens out in the ocean, and that could be provision of monitoring systems. Think about it like a CCTV station for the ocean. It's essentially a virtual wet wall that you build out if you're using the buoys. You can go out 200 nautical miles from your coastline if you are concerned about national security. You can tell what's coming across your water border, you know, whether that is narco submarines going underwater or whether there are small boats crossing at night, you know, in the dark over the water, or whether it's small aerial drones, you know, like the efforts and the issues that we saw around the coastline of New Jersey and New York, end of last year, you know, aerial drones coming on board, coming over the shore at night. It is also using vehicles to then interrogate those targets that you've identified through your buoys on a more persistent manner. I think then on the vehicle side, it is also finding assets that you need to look for on a roaming basis. It is clearing seaways. It is doing, you know, mine detection or unexploded ordnance detection underwater. Big differentiator between our vehicles and others is we're not the fastest. We're not the prettiest. We don't have the longest endurance of everybody out there, but we have really long endurance. We can carry a lot of payload. We are super stable. So we are essentially—we're your pickup truck. If you want to go and take an aerial drone or a swarm of aerial drones out on an autonomous basis, we just demonstrated that together with RedCat out at CS Space in Washington, DC. You know, we put a landing pad on top of our 22-foot vehicle. We can go out there. We can launch their aerial drones. They can come back down. That's great. We've done other demonstrations in the past where we have towed sonar systems. We did this last year in San Diego, in an exercise where we were able to detect micro underwater robots. So you get into that counter-UUV world, and then, you know, it could be just more mundane. It could just be working, you know, in the—in the offshore energy space doing seabed surveys. Ultimately, where we see this, it is maritime domain awareness on a persistent, resident, and autonomous basis, and the ability to deliver autonomous payloads and give you that hyper-local picture of what's going on without putting the warfighter or, in the commercial space, the operator, at risk. That's very fascinating and very interesting. You are definitely part of the solution, of a maybe a much larger and a bigger solution. When you think of, like, you know, contracts that come out of the government, whether it is defense or it is homeland security or what have you, how do you kind of fit in in terms of, you know, they're probably not going to give you a direct contract with OPTT per se. There could be a much larger contractor that would be involved here. As you think of your partnerships, who all are you partnering with, as far as these government contracts are concerned? That's a great question, Kunal. Yes, we don't really want to—we don't really want to be a prime contractor because with that comes a whole bunch of additional overhead. You know, then we have to become more platform agnostic. We like our platforms. I think what we're doing is we partner with the appropriate prime contractors that can secure these large, as you said, larger contracts or programs, really, that entail a whole bunch of solutions. Some of those solutions could be purely AI-focused. Some of it could be underwater vehicles. Some of it could be large manned assets. There's oftentimes also a need for some smaller unmanned assets or some forward-deployed buoys that help with comms and data communications and so on and so forth. You know, last year, I think we were public. We were working with—these are just examples, obviously—but we were working with EpiSci on a project for the U.S. Navy. I think EpiSci recently were acquired by Applied Intuition. In the past, we were working on some work for DHS, and that was through, I believe, I think it was through Amentum. You know, we've done work with Adams Communications on the work we've been doing with the buoy out in Monterey. You look at our partnerships overseas. We recently struck partnerships and agreements with Unique Group on the commercial side. They're based out of the UAE in order to work with them to develop and deliver our capabilities into the commercial markets out in the Middle East. We've got a partnership with Remah International Group, which is a, you know, large Emirati-owned defense contractor in Abu Dhabi. We have been working with them and recently demonstrated our capabilities at Navdex in Abu Dhabi. That is to help us develop a footprint in the region that can help us service the defense and security needs of, you know, the—the UAE specifically, but then also, you know, the broader Gulf Cooperation Council. We have partnered with entities in Latin America, and they vary in sizes depending on who the end customer is and what the application is. Generally speaking, you know, we—we try and position ourselves to be as prime contractor-friendly as can be. You know, when there are opportunities on smaller contracts, we would obviously take them directly with the US government. You know, we are—we have been public in the past. We—we are not directly named on three IDIQs for uncrewed systems that we have with NOAA. But, you know, obviously, they're smaller in value because they're specifically aimed at just one type of system. But yeah, that's—you know, we work with the—we work with the very large, you know, all the way down to the kind of the specialized contractors that have, you know, smaller regionally servicing contracts. Got it. Got it. Now, bringing it all down to, you know, what investors—you know, investors definitely care about the market potential and the growth prospects and what have you. They also care about profitability. One of the things that you had talked about a few months ago was that you would be profitable by the end of calendar 2025. Want to understand, you know, given—all the changes that are happening and probably changes that are happening on an everyday basis, maybe even, you know, hourly basis, on policies and what have you, how are you thinking about profitability and what kind of revenue run rate do you need to kind of get there? Yeah. I think there's a couple of points, you know, on that to highlight. I mean, you said it yourself, Kunal. I think we're living in some fairly unprecedented times in terms of volatility and, you know, changes to policies that may or may not affect us and changes to procurement approaches, and, you know, markets going up, markets going down. I think the one thing we control and what we are priding ourselves on is that we are good operators. Everybody at OPT understands the environment that we operate. You know, we made massive strides last year in materially reducing operating expenses at OPT. You know, that's a permanent change we've embedded. You know, that wasn't a temporary blip. We worked hard to embed that and remove some of those costs that the company was carrying. On top of that, we've really worked on increasing our bookings and backlog. We've continued, you know, as you've seen over the past, you know, three years, two and a half, three years, we've really continued that pathway of increasing revenues. You know, when you look at our investor relationship, you can see that progression and how that's been moving forward. I think when you look at our pipeline, I think we've managed to build a pipeline, you know, with our commercial team that's been hovering around that, you know, $80 million-$90 million mark. Mm-hmm. We just talked about how long it takes to convert some of these efforts. You know, if you looked at that, that pipeline, if you risk-adjust it, you know, if we were to add nothing to it, it's probably good for something between, call it, $3 million-$6 million a quarter. If—if we convert, you know, depending on which risk adjustments you look at and how long certain projects take. That is sort of—that is sort of where that pipeline sits. We are confident that that pipeline is continually scaling above that. There is obviously going to be additional revenue upside on a quarterly basis that comes into that. I think that puts you into that realm of, you know, being at or near, you know, cash flow positive. I think we are confident that the scaling that we are seeing is going to lead to the, you know, positive cash flow and profitability that we have been laying out based on the pipeline backlog, you know, demand signals that we are seeing, and all the other efforts that are going on and on. That's great. That is great. One last thing, and I couldn't let you go before that, before asking you this is valuation. And you've again, I mean, in all our conversations, time and again, you've talked about how, you know, and, how you are valued at a discount to peers and potential competitors and everybody else in the space. Talk about valuation. Talk about who the, you know, who you are thinking of as comps, and why do you think there is such a disconnect between your valuation and their valuation? I think, you know, obviously, I can't tell you what the capital markets think. Of course. Nobody knows. I do not have that crystal ball. If I did, I would not share it. Yeah, totally. I think what is fair to say is that there is a huge influx on private, particularly venture capital money into our space. You can call it broadly defense tech, particularly, but on the maritime defense tech side. You know, there are billions of dollars that just in the last four-plus months have flown into this space or been pledged into this space. The administration, I think rightly so, is talking about, you know, revitalizing the maritime industrial base. I think all the focus is in our space. Having said that, in the public comp side, you either have the very large, established and sometimes centuries-old shipbuilding companies in other spaces. Most of the newer upstarts with high valuations, these are high valuations obviously based on venture capital marks. They sit in the private spaces. I think the difference there that, as far as we can tell or we can see, is that obviously we go out every quarter and lay it all out for everybody to see how our pipeline is scaling, how our costs are going on, and so on and so forth. On the venture side, I think some of that capital that is going in, they're not looking for the quarterly results. They're going, "Okay, I funded you to the tune of $50 million or $100 million, and I, you know, that gives you a valuation of $500 million. Obviously, I will keep on monitoring how you're progressing." The next round that these guys are looking to raise isn't for another 15 or 18 months or sometimes 24 months. That gives them all that time in the background to keep on building up, then showcase where things are going. I think some of those multipliers on the valuation side in the private space are more akin to your traditional, call it, you know, X or anything as a service multipliers than where we sit in the public space. I think we're still being judged or marked against what is more the kind of traditional industrial space. I think that's where some of the discrepancy comes in, whereas we're really more alike to the defense tech, maritime defense tech that sits on the venture side. I think the public markets perceive us sitting more in that kind of industrial space on the more traditional side. I think that's part of the discrepancy. You know, the benefit of us being public is, you know, we have solid governance structures. You know, we're obviously audited all the time. There's nothing that—there's nothing to hide. Everybody can see everything that we're doing all the time. You know, we're proud to kind of build in that space. That's great. We are over time, way over time. This was such an interesting conversation that it had to flow over time. You know, one of the things that I kind of took away, especially from the last answer that you just gave, is, hey, this is something where you're building for the long term. People in the venture space kind of see the long-term possibility, and that is what they're investing against. You know, the near-term distraction of, like, next year's multiples or whatever is something very, very short term. That should resolve itself over time as you keep delivering. As visibility into the business kind of increases, you should be able to get proper valuations. No, we look forward to it. You know, we're going to keep on doing what we know how to do. That is get solid solutions that make the ocean safer, make our nation safer, you know, protect the warfighter and enable us to step up to kind of work in the ocean security space at a scale that starts becoming very material. Great. On that note, Philipp, thank you so much. Folks on the call, apologize. This went longer than what we had kind of originally thought. If you have any questions, please email me or, you know, or reach out otherwise to any of us on the call, and we will respond to your questions. Have a good day. Thank you so much, Philipp. Have a great day. Thank you, Kunal. Great to see you. Thank you. Thanks.