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What changed in Coda Octopus Group, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Coda Octopus Group, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+324 added−318 removedSource: 10-K (2025-01-29) vs 10-K (2024-01-29)

Top changes in Coda Octopus Group, Inc.'s 2024 10-K

324 paragraphs added · 318 removed · 202 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

93 edited+49 added−53 removed50 unchanged
Biggest changeThe range of our solutions are complementary and include: Type of Systems Description Geophysical Systems Comprising Hardware and Software; GNSS-Aided Navigation Systems (Attitude and Positioning Systems) Comprising Hardware and Software Real Time Volumetric Imaging Sonar Comprising Hardware and Software Diver Augmented Vision Display System Comprising Hardware and Software These products are sold, leased or rented into various marine sectors and include: ● Marine geophysical survey ● Offshore Renewables (“Wind Energy”) ● Underwater construction, inspection and monitoring ● Diving Companies ● Commercial and Defense Diving ● Salvage and decommissioning ● Oil and Gas (“O&G”) ● Commercial fisheries ● Environmental, mammal and habitat monitoring ● Underwater Defense Applications ● Marine vehicles and robotics ● Port and Harbor Security, law enforcement and first responders ● Research and education 1.
Biggest changeThe range of solutions which it offers to the market are complementary and include: Product Family Composition Real time volumetric imaging sonar Echoscope ® / Echoscope PIPE ® range Hardware and Software Diving Technology Diver Augmented Vision Display (DAVD) range Hardware and Software Digital Audio Communications System Voice HUB_4 Hardware and Software GNSS-Aided Navigation Systems (providing heading, pitch, yaw and roll data at sea) F280 Series ® Hardware and Software Geophysical Solutions (used in conjunction with sidescan and sub-bottom data acquisition) DA4G ® , GeoSurvey ® and Survey Engine Hardware and software These products and/or solutions are sold, rented or leased into various marine sectors such as: ● Marine geophysical survey ● Offshore Renewables (“Wind Energy”) ● Underwater construction, inspection and monitoring ● Diving Companies ● Commercial and Defense Diving ● Salvage and decommissioning ● Oil and Gas (O&G”) ● Robotics ● Commercial fisheries ● Environmental, mammal and habitat monitoring ● Underwater Defense Applications ● Marine vehicles and robotics ● Port and Harbor Security, law enforcement and first responders ● Research and education 1.
Real-time compass and depth are also displayed to the diver to reduce disorientation. Visibility for diver and team is significantly enhanced with both real-time camera and 3D sonar data (providing underwater night-vision) and also high-resolution maps and models of the entire work site and surroundings.
Real-time compass and depth are also displayed to the diver to reduce disorientation. Visibility for the diver and team is significantly enhanced with both real-time camera and 3D sonar data (providing underwater night-vision) and also high-resolution maps and models of the entire work site and surroundings.
We are marketing the DAVD (through live demonstrations) to Navies globally and also to the commercial diving market. We have significant interest from a number of reputable global commercial offshore service providers and are working with them for early adoption of the technology and also a number of European friendly Navies including the UK Ministry of Defense (MOD).
We are marketing the DAVD (through live demonstrations) globally to navies and the commercial diving market. We have significant interest from a number of reputable global commercial offshore service providers and are working with them for the early adoption of the technology and also a number of European friendly Navies including the UK Ministry of Defense (MOD).
Martech enjoys pre-approvals to allow it to be short-listed for certain types of government contracts. Much of the more significant business secured by Martech is through the formal government or government contractor tendering process. Martech has the requisite accreditations for its business including being Lloyds Register accredited to ISO 9001:2015 and Cyber Essentials certification. Coda Octopus Colmek, Inc.
Martech enjoys pre-approvals to allow it to be short-listed for certain types of government contracts. Much of the more significant business secured by Martech is through the formal government or government contractor tendering process. Martech has the requisite accreditations for its business including being Lloyds Register accredited to ISO 9001:2015 and Cyber Essentials Plus certification. Coda Octopus Colmek, Inc.
The DAVD technology benefits not only the diver and direct supervisor on the surface, but also engineers, end-clients, rescue workers and support personnel who all have vested interest in a successful and safe mission. DAVD provides the location of the diver, the dive support vessel, work site assets and any hazards that are known or discovered in real-time.
The DAVD technology benefits not only the diver and direct supervisor on the surface, but also engineers, end-clients, rescue workers and support personnel who all have a vested interest in a successful and safe diving mission. DAVD provides the location of the diver, the dive support vessel, work site assets and any hazards that are known or discovered in real-time.
We also believe that our new generation of Echoscope PIPE ® is the only sonar that can generate multiple real time 3D/4D/5D/6D acoustic images using different acoustic parameters in real time such as field of view, pulse length, filters, beam density and various beamforming modes.
We also believe that our new generation of Echoscope PIPE ® is the only sonar that can generate concurrently multiple real time 3D/4D/5D/6D acoustic images using different acoustic parameters in real time such as field of view, pulse length, filters, beam density and various beamforming modes.
Furthermore, by combining the DAVD with our real time 3D sonars it allows diving to be performed in difficult water conditions (turbidity or zero visibility issues) and thus addresses the common problem of underwater operations having to be aborted due to visibility issues.
Furthermore, by combining the DAVD with our real time 3D sonars, (Echoscope ® ), it allows diving to be performed in difficult water conditions (turbidity or zero visibility issues) and thus addresses the common problem of underwater operations having to be aborted due to visibility issues.
We have several patent applications pending for these innovations. 5D Sonars (Echoscope PIPE ® ) The advancement that the Company has made with its 5D Sonars is the ability to process and utilize much more of the data that is acquired by our volumetric imaging sonars.
We have several patent applications pending for these innovations. 5D Sonars (Echoscope PIPE ® ) The advancement that the Company has made with its 5D Sonars is the ability to process and utilize much more of the data that is acquired and processed by our volumetric imaging sonars.
Coda Octopus Group, Inc., is organized under the laws of the State of Delaware as a holding company that conducts its business through subsidiaries, several of which are organized under the laws of foreign jurisdictions, including England, Scotland, Denmark, The Netherlands, Australia and recently India.
Coda Octopus Group, Inc., is organized under the laws of the State of Delaware as a holding company that conducts its business through its subsidiaries, several of which are organized under the laws of foreign jurisdictions, including England, Scotland, Denmark, The Netherlands, Australia and India.
The capability of our volumetric imaging sonars covers a broad breadth of activities underwater particularly for any form of underwater construction, salvaging, placements, decommissioning, obstacle avoidance, complex underwater mapping and real time 3D navigation in zero visibility conditions.
The capability of our volumetric imaging sonars covers a broad breadth of activities underwater particularly for any form of real time monitoring in 3D, underwater construction, salvaging, placements, decommissioning, obstacle avoidance, complex underwater mapping and real time 3D navigation in zero visibility conditions.
March 22, 2039 *US 11,448,755 Concerns a method of correcting beamformed data through split aperture beamforming June 3, 2041 US11,579,288 Concerns a method of pseudo random frequency sonar ping generation for the purposes of data and hardware cost reduction April 14, 2038 JP7224959 Concerns a method of compressing sonar data April 14, 2038 US10, 877,282 Head Up Display System for Underwater Face Plate (within an underwater dive helmet or dive mask) License for exclusive use granted to Coda Octopus.
March 22, 2039 *US 11,448,755 Concerns a method of correcting beamformed data through split aperture beamforming June 3, 2041 US11,579,288 Concerns a method of pseudo random frequency sonar ping generation for the purposes of data and hardware cost reduction April 14, 2038 JP7224959 Concerns a method of compressing sonar data February 28, 2038 US10, 877,282 Head Up Display System for Underwater Face Plate (within an underwater dive helmet or dive mask) License for exclusive use granted to Coda Octopus.
Initially, its operations consisted primarily of developing software for subsea mapping and visualization using sidescan sonar (a technology widely used in commercial offshore geophysical survey and naval mine-hunting to detect objects on, and textures of, the surface of the seabed). 6 In June 2002, we acquired Octopus Marine Systems Ltd, a UK corporation, and changed our name to Coda Octopus Limited.
Initially, its operations consisted primarily of developing software for subsea mapping and visualization using sidescan sonar (a technology widely used in commercial offshore geophysical survey and naval mine-hunting to detect objects on, and textures of, the surface of the seabed). 8 In June 2002, we acquired Octopus Marine Systems Ltd, a UK corporation, and changed our name to Coda Octopus Limited.
Coda Octopus Martech Limited (“Martech”) Martech which is UK-based, operates in the specialized niche of bespoke design and manufacturing services mainly to the United Kingdom defense and subsea industries. Its services are provided on a custom subcontract basis where high quality and high integrity devices are required in small quantities. Their skills set includes both hardware and software design.
Coda Octopus Martech Limited (“Martech”) Martech, which is UK-based, operates in the specialized niche of bespoke design and manufacturing services mainly to the United Kingdom defense and subsea industries. Its services are provided on a custom subcontract basis where high quality and high integrity devices are required in small quantities. Their skill set includes both hardware and software design.
All activities of this now-defunct Norwegian subsidiary, Coda Octopus R&D AS, have been transferred to Coda Octopus Products Limited (Edinburgh). On July 13, 2004, the Company effected a reverse merger pursuant to the terms of a share exchange agreement between The Panda Project, Inc. (“Panda”), a Florida corporation, and a now defunct entity affiliated with Coda Octopus Ltd. (“Coda Parent”).
All activities of this now-defunct Norwegian subsidiary, Coda Octopus R&D A/S, have been transferred to Coda Octopus Products Limited (Edinburgh). On July 13, 2004, the Company effected a reverse merger pursuant to the terms of a share exchange agreement between The Panda Project, Inc. (“Panda”), a Florida corporation, and a now defunct entity affiliated with Coda Octopus Ltd. (“Coda Parent”).
Companies such as Kongsberg Gruppen, R2Sonic, LLC, Tritech International Ltd., United Kingdom, BlueView Technologies Inc., USA (now a part of Teledyne Technologies Incorporated), and Norbit Group AS Norway are examples of companies offering imaging sonar solutions (such as multibeam sonars and/or 2D scanning sonars), but none of these sonar offerings are directly comparable or competitors to our real time volumetric 3D/4D/5D and 6D sonar solutions as their scanning sonar, single beam or multibeam sonars are not real time 3D imaging sonars and therefore cannot image moving targets underwater.
Companies such as Kongsberg Gruppen, R2Sonic, LLC, Tritech International Ltd., United Kingdom, BlueView Technologies Inc., USA (now a part of Teledyne Technologies Incorporated), and Norbit Group AS Norway and Kraken Robotics are examples of companies offering imaging sonar solutions (such as multibeam sonars, SAS sonars and/or 2D scanning sonars), but none of these sonar offerings are directly comparable or competitors to our real time volumetric 3D/4D/5D and 6D sonar solutions as their scanning sonar, single beam or multibeam sonars are not real time 3D imaging sonars and therefore cannot image moving targets underwater.
US 11,846,733 Concerns a method of stabilizing sonar images October 30, 2035 JP 7224959 Concerns a method of pseudo random frequency sonar ping generation to reduce data and hardware cost April 14, 2038 US 11,874,407 Concerns technologies for dynamic, real time, four-dimensional volumetric multi-object underwater scene segmentation February 19, 2040 US11,789,146 Combined method of location of sonar detection device August 5, 2039 Trademarks We own the registered trademarks listed below and they are used in conjunction with the products that we market and sell: Coda ® , Octopus ® , CodaOctopus ® , CodaOctopus & Design ® , Octopus & Design ® , F180 ® , F280 ® , F280 Series ® , Echoscope ® , Echoscope 4G® , Echoscope 5D ® , 5D Echoscope ® , Echoscope 6D ® , 6D Echoscope ® , Echoscope PIPE ® Ping-Pong Echoscope Sonar ® , Ping-Pong Echoscope ® , Ping-Pong Sonar ® , Echoscope Sequencer ® 4G Underwater Survey Explorer ® , 4G USE ® , Echoscope Sequencer ® , Survey Engine ® , Dimension ® , DAseries ® , GeoSurvey ® CodaOctopus ® Air, CodaOctopus ® Vantage ® ; CodaOctopus ® UIS; CodaOctopus ® USE, Sentiris ® and Thermite ® .
US 11,846,733 Concerns a method of stabilizing sonar images October 30, 2035 JP 7403226 Concerns a method of pseudo random frequency sonar ping generation to reduce data and hardware cost April 14, 2038 US 11,874,407 Concerns technologies for dynamic, real time, four-dimensional volumetric multi-object underwater scene segmentation February 19, 2040 US11,789,146 Concerns a combined method of location of sonar detection device August 5, 2039 Trademarks We own the registered trademarks listed below and they are used in conjunction with the products that we market and sell: Coda ® , Octopus ® , CodaOctopus ® , CodaOctopus & Design ® , Octopus & Design ® , F180 ® , F280 ® , F280 Series ® , Echoscope ® , Echoscope 4G® , Echoscope 5D ® , 5D Echoscope ® , Echoscope 6D ® , 6D Echoscope ® , Echoscope PIPE ® Ping-Pong Echoscope Sonar ® , Ping-Pong Echoscope ® , Ping-Pong Sonar ® , Echoscope Sequencer ® 4G Underwater Survey Explorer ® , 4G USE ® , Echoscope Sequencer ® , Survey Engine ® , Dimension ® , DAseries ® , GeoSurvey ® CodaOctopus ® Air, CodaOctopus ® Vantage ® ; CodaOctopus ® UIS; CodaOctopus ® USE, Sentiris ® , Thermite ®; PA and PA Precision Acoustics.
Competing acoustic imaging sonars such as the multibeam sonars are primarily seabed mapping tools which are not designed to perform complex seabed mapping or imaging of moving objects in 3D underwater. The Echoscope ® technology therefore is a key sensor for underwater inspection and monitoring in real time 3D.
Competing acoustic imaging sonars such as the multibeam sonars are primarily seabed mapping tools which are not designed to perform complex seabed mapping or imaging of moving objects in 3D underwater. The Echoscope ® technology therefore is a key sensor for underwater construction activities, inspection and monitoring in real time 3D.
These companies’ operations must comply with the laws of the countries under which they are incorporated and are likely to be different from the equivalent laws of the United States. 7 Marine Technology Business (“Products Segment”) Our Marine Technology Business develops proprietary solutions for both the commercial and defense subsea market.
These companies’ operations must comply with the laws of the countries under which they are incorporated, and these laws are likely to be different from the equivalent laws of the United States. 9 Marine Technology Business (“Products Segment”) Our Marine Technology Business develops proprietary solutions for both the commercial and defense subsea market.
The DAVD comprises both hardware comprising the HUD, Diver Processing Pack (DPP), Cables and Topside Control Unit along with 4G USE ® DAVD Edition real time visualization software. All these developments and products have been performed by the Company.
The DAVD comprises both hardware comprising the HUD, Diver Processing Pack (DPP), cables and topside Control Unit (DAVD Control Panel) along with 4G USE ® DAVD Edition real time visualization software. These developments and products have been performed by the Company.
When we can we protect our innovations and inventions through a variety of means, including, but not limited to, applying for patent, copyright, and trademark protection domestically and internationally, and protecting our trade secrets. We incentive our employees to innovate through our Patent Reward Scheme.
When we can, we protect our innovations and inventions through a variety of means, including, but not limited to, applying for patent, copyright, and trademark protection domestically and internationally, and protecting our trade secrets. We incentivize our employees to innovate through our Patent Reward Scheme.
Cross-Group Synergies Our Marine Technology Business and Marine Engineering Services Business have established synergies in terms of customers and specialized engineering skills for robust, rugged, and repeated engineering solutions relating to data acquisition, data computation and display of the data.
Cross-Group Synergies Our Marine Technology Business and Marine Engineering Services Business both have established synergies in terms of customers, technologies and specialized engineering skills for robust, rugged, and repeated engineering solutions relating to data acquisition, data computation and display of the data.
Typically, they prototype subassemblies for their customers and after going through various acceptance tests, including first article inspection approvals, they are then awarded the manufacturing contracts. Many of these manufacturing contracts have a repeat orders profile which typically follows the life cycle of the defense program that is using the subassembly.
Typically, they prototype subassemblies for their customers and after going through various acceptance tests, including first article inspection approvals, they are then awarded the manufacturing contracts. Many of these manufacturing contracts have a repeat orders profile which typically follows the life cycle of the defense program that is using the subassembly component within the broader program.
The Marine Technology Business operates thorough our wholly owned subsidiaries Coda Octopus Products, Inc (Orlando), Coda Octopus Products Ltd (UK), Coda Octopus Products A/S (Denmark and branch office Coda Octopus Products A/S in The Netherlands), and Coda Octopus Products (India) Private Limited (India).
The Marine Technology Business operates through our wholly owned subsidiaries Coda Octopus Products, Inc., (Orlando), Coda Octopus Products Ltd (UK), Coda Octopus Products A/S (Denmark) and branch office Coda Octopus Products A/S in The Netherlands)), and Coda Octopus Products (India) Private Limited (India).
Uniquely also, using a single sensor (our Echoscope PIPE®) range we can provide different outputs to the various parts of the survey team, thus reducing the number of different sensors required on these underwater projects and thus the costs associated with these underwater operations. 8 About the Company’s 5D and 6D Sonars Innovations 5D and 6D imaging sonars are new to the subsea market and constitute an innovation by the Company.
Uniquely also, using a single sensor (our Echoscope PIPE ® ) range we can provide different data outputs to the various parts of the survey team, thus reducing the number of different sensors required on these underwater projects, and ultimately reducing the costs associated with these operations. 11 About the Company’s 5D and 6D Sonars Innovations 5D and 6D imaging sonars are new to the subsea market and constitute an innovation by the Company.
Echoscope ® Software The Echoscope® technology works in conjunction with our internally developed software (USE, Construction Monitoring System (CMS), 4G US ® and 4G USE ® DAVD Edition). The software is a critical component of the capabilities and features of our sonar series.
Echoscope ® Software The Echoscope® technology is used in conjunction with our internally developed software (USE, Construction Monitoring System (CMS), 4G USE ® and 4G USE ® DAVD Edition). The software is a critical component of the capabilities and features of our sonar series.
They largely operate as sub-contractors to prime defense contractors, and their engineering solutions are typically designed for integration into broader defense programs of record where high levels of reliability and quality are essential pre-requisites for securing and maintaining these agreements with their customers.
They largely operate as sub-contractors to prime defense contractors, and their engineering solutions typically constitute sub-components designed for integration into larger defense programs of record where high levels of reliability and quality are essential pre-requisites for securing and maintaining these agreements with their customers.
In any one financial year, between 20% to 30% of our consolidated revenues may be derived from these customers either alone or collectively. 4 The Services Segment operates through our wholly owned subsidiaries, Coda Octopus Colmek, Inc (“Colmek”) which we acquired by the Company in 2007, based in Salt Lake City, Utah, and Coda Octopus Martech Limited (“Martech”) which was acquired by the Company in 2006, based in Portland, United Kingdom.
In any one financial year, between 20% to 30% of our consolidated revenues may be derived from these customers either alone or collectively. 5 The Services Segment operates through our wholly owned subsidiaries, Coda Octopus Colmek, Inc (“Colmek”), which is based in Salt Lake City, Utah and which we acquired in 2007, and Coda Octopus Martech Limited (“Martech”), which is based in Portland, United Kingdom and which we acquired in 2006.
In the last 3 years we have advanced our existing sonar technology and have filed several significant patents applications pertaining to these inventions including covering our newly innovated 5D and 6D sonars. Furthermore, we have recently been awarded a patent which concerns a method of predicting and adjusting the laying of cable using sonar imaging.
In the last 3 years we have advanced our existing sonar technology and have filed several significant patents applications pertaining to these inventions including our 5D and 6D innovations. Furthermore, we have recently been awarded a patent which concerns a method of predicting and adjusting the laying of cable using sonar imaging.
The competing 3D technology, the multibeam, which is the current standard bearer for imaging sonars in the market is for mapping of the seabed. The Echoscope ® technology can also map the seabed (and is superior to the multibeam for complex mapping and inspection of complex underwater structures) but can also image in real time 3D moving objects underwater.
The competing 3D technology, the multibeam, which is the current standard bearer for imaging sonars in the market is for mapping of the seabed. The Echoscope ® technology can also map the seabed (and is superior to the multibeam for complex mapping and inspection of complex underwater structures) and in addition can image moving objects underwater in 3D.
We believe that this technology is superior to the other imaging sonars in the market as it generates real time 3D, 4D, 5D and 6D images of the underwater environment irrespective of low or zero visibility conditions and, unlike conventional sonars, can image a volume (as opposed to a slice of data) and provide real time 3D inspection and monitoring capability underwater.
We believe that the Echoscope PIPE ® technology is superior to the other imaging sonars in the market as it generates real time 3D, 4D, 5D and 6D images of the underwater environment irrespective of low or zero visibility conditions and, unlike conventional sonars, can image a volume of data (as opposed to a slice of data).
Our corporate structure is as follows: Corporate History The Company began as Coda Technologies Limited. This company now operates under the name Coda Octopus Products Limited, a United Kingdom corporation formed in 1994 as a start-up company with its origins as a research group at Herriot-Watt University, Edinburgh, Scotland.
Corporate History The Company began as Coda Technologies Limited. This company now operates under the name Coda Octopus Products Limited, a United Kingdom corporation formed in 1994 as a start-up company with its origins as a research group at Heriot-Watt University, Edinburgh, Scotland.
DAVD’s concept of using a pair of glasses inside the face mask, helmet or other diving suits is protected by patent. The Company has an exclusive license to exploit this utility patent.
DAVD’s concept of using a pair of glasses, which is capable of augmented reality display, inside the face mask, helmet or other diving suits is protected by patent. The Company has an exclusive license to exploit this utility patent.
This is a significant patent for the Offshore Renewables Market, which as the world makes the energy transition is set to expand globally. The Offshore Renewables sector is important for our growth strategy. Our Echoscope ® technology is used for real time monitoring of cable installations for some of these offshore renewable projects.
This is a significant patent for the Offshore Renewables Market, which as the world makes the energy transition is set to expand globally. Our Echoscope ® technology is used for real time monitoring of cable installations for many of these offshore renewable projects.
(“Coda” “the Company” or “we”), through its wholly owned subsidiaries, operates two distinct businesses: ● the Marine Technology Business (also referred to in this Form 10-K as “Products Business”, “Products Operations” or “Products Segment”); and ● the Marine Engineering Business (also referred to in this Form 10-K as “Engineering Business”, “Engineering Operations”, or “Services Segment”).
Overview Coda Octopus Group, Inc. (“Coda” “the Company” or “we”), through its wholly owned subsidiaries, operates two distinct segments: ● the Marine Technology Business (also referred to in this Form 10-K as “Products Business”, “Products Operations” or “Products Segment”); and ● the Marine Engineering Business (also referred to in this Form 10-K as “Engineering Business”, “Engineering Operations”, or “Services Segment”).
Real Time 3D/4D/5D and 6D Volumetric Sonar In the field of Real Time 3D/4D/5D imaging, we are unaware of other companies offering a similar product.
In the field of Real Time 3D/4D/5D imaging, we are unaware of other companies offering a similar product.
Real Time Volumetric Imaging Sonars (ranging from 3D/4D, 5D and 6D) We design, develop and supply what we believe is the world’s most advanced series of real time volumetric imaging sonar. This is the culmination of over 25 years of research and development. This technology is protected by multiple patents.
Real Time Volumetric Imaging Sonars (ranging from 3D/4D, 5D and 6D) We design, develop and supply what we believe is the world’s most advanced series of real time volumetric imaging sonar (Echoscope® and Echoscope PIPE®). This is the culmination of over 25 years of research and development.
In our Services Segment, we are exposed to the following competitive challenges: Marine Engineering Businesses Through our marine engineering operations, Coda Octopus Colmek, Inc. and Coda Octopus Martech Limited, we are involved in custom engineering for the defense industry in the United States and in the United Kingdom and are dependent on subcontract from the major prime contractors.
Marine Engineering Businesses Through our marine engineering operations, Coda Octopus Colmek, Inc. and Coda Octopus Martech Limited, we are involved in custom engineering for the defense industry in the United States and in the United Kingdom and are dependent on subcontract from the major prime contractors.
Geophysical Range of Products Geophysical Hardware and Software We started our business in 1994 designing and developing the GeoSurvey ® software and hardware package for acquisition and processing of sidescan sonar and sub-bottom profiler data.
Geophysical Range of Products The Geophysical range of products is marketed under the brands DA4G ® , GeoSurvey ® and Survey Engine ® . We started our business in 1994 designing and developing the GeoSurvey ® software and hardware package for acquisition and processing of sidescan sonar and sub-bottom profiler data.
We believe that our real time 3D/4D/5D/6D imaging sonars are the only acoustic imaging sonars which are capable of providing real time 3D/4D/5D/6D imaging of moving objects in zero visibility water conditions and also providing users with the capability to make real time 3D physical measurements of objects underwater.
We believe that our real time 3D/4D/5D/6D imaging sonars are the only acoustic imaging sonars capable of providing real time 4D imaging of moving objects in zero visibility water conditions and making real time 3D physical measurements of objects underwater.
Diver Augmented Vision Display System (“DAVD”) There are various diving systems in the market that provide a combination of different aspects of our DAVD system but no systems that directly compete in the form of embedded fully transparent glasses mounted internally within the diver helmet or mask and on which various types of images, data and augmented reality information can be displayed.
There are various diving systems in the market that provide a combination of different aspects of our DAVD system but no systems that directly compete in the form of embedded fully transparent glasses mounted internally within the diver helmet or mask for visual display of a range of data and augmented reality information which can be directly consumed by the diver underwater.
The DAVD is currently in early-stage adoption with the US Navy and enjoys the benefit of an Approved Navy Use (ANU) product. DAVD also is certified for CE markings for compliance with the European Union and the United Kingdom health and environmental requirements.
The DAVD is currently in early-stage adoption with the US Navy and enjoys the benefit of the classification Authorization for Navy Use (ANU) item. DAVD also is certified for CE markings which covers compliance with the European Union and the United Kingdom health environmental and health and safety requirements.
We therefore can give no assurance that companies such as these will not enter this market. Furthermore, companies such as Kongsberg Gruppen and Teledyne can expend significantly more in any one fiscal year on R&D and Business Development, key pillars for increasing market share of underwater imaging sonars, than the Company.
Furthermore, companies such as Kongsberg Gruppen and Teledyne can expend significantly more in any one fiscal year on R&D and Business Development, key pillars for increasing market share of underwater imaging sonars, than the Company.
We expend a material part of our cash resources in building our Patent Portfolio. We also incentivize our staff to contribute to our Patent Portfolio by having in place a competitive Patent Reward Scheme. In the 2023 FY we added four new patents to our portfolio. 14 Our patent portfolio consists of the following: Patent No.
We expend a material part of our resources in building our Patent Portfolio. We also incentivize our staff to contribute to our Patent Portfolio by having in place a competitive Patent Reward Scheme. 18 Our patent portfolio consists of the following: Patent No.
We believe the DUS variant represents the biggest market opportunity for the DAVD technology in the USA addressing the defense, law-enforcement, and first-responders market. 5 The concept of utilizing a pair of transparent glasses in the Head Up Display (HUD) underwater for this purpose, is protected by patent.
We continue to believe that the DUS variant represents the biggest market opportunity for the DAVD technology in the USA with the addressable market including defense, law enforcement and first responders. 7 The concept of utilizing a pair of transparent glasses in the HUD underwater for this purpose, is protected by patent.
Competition In our Marine Technology Business (Products Business), we are exposed to the following competitive challenges: Data Acquisition Products (GEO Products) The industry for data acquisition and processing systems for sidescan and sub-bottom profiler data is fragmented with several companies occupying niche areas, and we face competition from different companies with respect to our different products.
The industry for data acquisition and processing systems for sidescan and sub-bottom profiler data is fragmented with several companies occupying niche areas, and we face competition from different companies with respect to our different products.
Our PIPE technology generates multiple 3D images simultaneously in real time using different sonar/acoustic parameters (such as different beamforming methods, frequency, range, field of view, pulse length and other acoustic filters or shading).
In the previous generation of sonars (3G and 4G series), we could image and display one 3D image in real time. Our PIPE technology generates multiple 3D images simultaneously in real time using different sonar/acoustic parameters (such as different beamforming methods, frequency, range, field of view, pulse length and other acoustic filters or shading).
Data and information sharing traditionally ends when the diver leaves the surface. The DAVD is a significant technology for both defense and commercial underwater diving applications, and we believe that Coda Octopus has the opportunity to standardize this technology globally.
Using the current method of diving, data and information sharing end when the diver leaves the surface. The DAVD is a significant technology for both defense and commercial underwater diving applications, and we believe that we have the opportunity to standardize this technology globally.
These arrangements often give the Marine Engineering Business long term preferred/sole supplier status for the parts they supply into these programs, technology refresh and obsolescence management opportunities with these customers and they generally use these long-standing relationships to win more contracts with these customers.
These arrangements often give the Marine Engineering Business long term preferred/sole supplier status for the sub-components they supply into these programs and provide them with opportunity to participate in any requirements for technology refresh or obsolescence management for the components supplied. They generally use these long-standing relationships to win more contracts with these customers.
In addition, the Echoscope ® in many instances enables the user to monitor underwater operations from a surface vessel replacing the Remotely Operated Vehicles (ROVs) thus bringing considerable cost savings to our customers. Prior to January 2018, we were selling our third generation (3G) sonar series.
In addition, the Echoscope ® in many instances enables the user to monitor underwater operations from a surface vessel replacing the Remotely Operated Vehicles (ROVs) thus bringing considerable cost savings to our customers.
In addition, we have registered several internet domain names including www.codaoctopus.com; www.codaoctopusgroup.com; www.colmek.com and www.martechsystems.co.uk. Research and Development (“R&D”) Research and Development is foundational to our business strategy to ensure our growth strategy and maintain our competitiveness. The main costs that are incurred in this area are wages and salaries and prototyping.
In addition, we have registered several internet domain names including www.codaoctopus.com ; www.codaoctopusgroup.com ; www.colmek.com and www.martechsystems.co.uk; www.codaoctopusmartech.com; and www.acoustics.co.uk . Research and Development (“R&D”) Research and Development is foundational to our business strategy to ensure our growth strategy and maintain our competitiveness.
In addition, as a provider for the US Government, we may be subject to numerous laws and regulations relating to the award, administration, Defense Federal Acquisition Regulations (“DFARS”) and performance of US Government contracts, including the False Claims Act.
We are therefore dependent on obtaining, on a timely basis, export licenses to many foreign jurisdictions including China. In addition, as a provider for the US Government, we may be subject to numerous laws and regulations relating to the award, administration, Defense Federal Acquisition Regulations (“DFARs”) and performance of US Government contracts, including the False Claims Act.
However, the DAVD HUD technology is not limited to these products and/or applications. 10 Problem In Context The concept of using a pair of transparent glasses in the HUD to render real time information for underwater applications is protected by patent and Coda Octopus has an exclusive license from United States Department of the Navy at NSWC PCD to exploit this patent for all underwater diving activities.
The delivery of the new generation of DAVD HUD is a key milestone under the funded DUS Hardening Program. 13 Problem In Context The concept of using a pair of transparent glasses in the HUD to render real time information for underwater applications is protected by patent and Coda Octopus has an exclusive license from United States Department of the Navy at NSWC PCD to exploit this patent for all underwater diving activities.
ITEM 1. BUSINESS Corporate Information Our principal executive offices are located at 3300 S. Hiawassee Rd, Orlando, FL 32835. Our telephone number is +1 (407) 735-2406. We maintain a corporate website at www.codaoctopusgroup.com. (the Company’s website).
ITEM 1. BUSINESS Corporate Information Our principal executive offices are located at 3300 S. Hiawassee Rd, Orlando, FL 32835. Our telephone number is +1 (407) 735-2406. We maintain a corporate website at www.codaoctopusgroup.com. The reference to the Company’s website address does not constitute incorporation by reference of the information on the Company’s website into this Form 10-K.
This business model ensures recurring and long tail revenues since we continue to supply these parts, typically for the life of the program, which can span decades. Coda Octopus Colmek, Inc. and Coda Octopus Martech Ltd, qualify as small businesses. This opens opportunities under state requirements to collaborate with Prime Defense Contractors on these programs.
This business model ensures recurring and long tail revenues. Coda Octopus Colmek, Inc. and Coda Octopus Martech Ltd, qualify as small businesses. This opens opportunities under state requirements to collaborate with Prime Defense Contractors on these programs.
Our imaging sonar technology products and solutions marketed under the name of Echoscope® and Echoscope PIPE ® are used primarily in the underwater construction market, offshore renewables, and offshore oil and gas, complex underwater mapping, salvage operations, dredging, bridge inspection, navigation of underwater hazard, port and harbor security, mining, fisheries, commercial and defense diving, marine sciences sectors and more broadly applications for real time 3D monitoring, inspection and visualization underwater.
As part of our patent strategy, we endeavor to actively protect our innovations by seeking patent protection where appropriate. 4 Our imaging sonar series is marketed under the name Echoscope ® and Echoscope PIPE ® and are used primarily in the underwater construction, offshore renewables, and offshore oil and gas, complex underwater mapping, salvage operations, dredging, bridge inspection, navigation of underwater hazard, port and harbor security, mining, commercial and defense diving, marine sciences sectors and more broadly applications for real time 3D monitoring, inspection and visualization underwater.
The new technology is much more scalable towards future development of new product variants. The F280 Series ® is highly complementary to our real time Echoscope ® sonar series and they are packaged together to provide a more comprehensive solution. The F280 ® can be sold with or without our Echoscope ® . 3.
The F280 Series ® is an advancement of our F180 ® series and is highly complementary to our real time Echoscope ® sonar series and they are packaged together to provide a more comprehensive solution. The products within the F280 Series ® range can be sold with or without our Echoscope ® . 3.
Department of the Navy at Naval Surface Warfare Center Panama City Division to utilize the utility patent covering the concept of using the pair of transparent glasses as a data hub underwater. The DAVD tethered variant is an “Approved Navy Use” item. The untethered variant is currently going through validation process.
Department of the Navy at Naval Surface Warfare Center Panama City Division to utilize the utility patent covering the concept of using the pair of transparent glasses as a data hub underwater.
We believe our 5D and 6D series of sonars herald a significant leap forward in real time subsea imaging as this inventive capability allows a single sonar to provide different parts of the survey operations with multiple real time data sets (as opposed to one 3D dataset) for each part of the survey teams’ requirements.
Echoscope® Sonar Hardware We believe our 5D and 6D series of sonars herald a significant leap forward in real time subsea imaging as this inventive capability allows a single sonar to provide different parts of the survey operations with multiple real time 3D data sets (as opposed to one 3D dataset) for each part of the survey teams’ requirements. 12 Current competing imaging technologies such as the single beam, multibeam and scanning sonars are either real time 2D imaging sonars or 3D imaging sonars which are not capable of real time 3D imaging, that is to generate a 3D image underwater of moving objects.
We believe that our market share in this market segment of motion sensing equipment is relatively small. We sell our MOTION range as part of our equipment suite to complement our Echoscope ® real time 3D sonar range as well as supplying it individually.
We sell our MOTION range as part of our equipment suite to complement our Echoscope ® real time 3D sonar range as well as supplying it individually.
Moreover, these regulations may change from time to time in these jurisdictions, including the United States, depending on the existing relationship with the country to which the goods are exported.
Moreover, these regulations may change from time to time in these jurisdictions, including the United States, depending on the existing relationship with the country to which the goods are exported. Our international activities are significant to our revenues and profits (see Note 16 Disaggregation of revenue).
The recent crystallization of several significant hardware development projects by the Company, has seen R&D expenditures decreasing. Our products are complex and therefore we can give no assurance that even with spending a significant part of our resources on R&D, we will be successful in our development goals or realize significant monetization of these developments.
Our products are complex and therefore we can give no assurance that even with spending a significant part of our resources on R&D, we will be successful in our development goals or realize significant monetization of these developments. Furthermore, even following the launch of any product we may not succeed.
In addition, the costs of complying with some of the regulations including DFARS may be prohibitive. Employees As of the date hereof, we employ approximately 83 employees worldwide, of which 10 hold management positions. A large majority of our employees have a background in science, technology, software and hardware engineering, with a substantial part being educated to a degree level.
Employees As of the date hereof, we employ approximately 103 employees worldwide, of which 15 hold management positions. A large majority of our employees have a background in science, technology, software and hardware engineering, with a substantial part being educated to a degree level. A number of our employees hold PhD’s in the area of their specialization.
Designed specifically for sidescan and sub-bottom data acquisition, GeoSurvey has been purchased by numerous leading survey companies throughout the world and has been for many years the workhorse for processing data for Oil & Gas companies. The Geophysical range of products marketed under the brands DA4G and GeoSurvey ® are important for both Offshore Renewables and O&G.
Designed specifically for sidescan and sub-bottom data acquisition, GeoSurvey ® has been purchased by numerous leading survey companies throughout the world and has been the workhorse for processing data for Oil & Gas companies for many years.
Due to the state of the art of processing generally, there was an upper limit to the quantity of the acquired data that could be processed and displayed by our antecedent sonars. This meant that in the previous generation of sonars when a signal was emitted, it returned a single range and intensity value per beam.
Prior to this, due to limitation of processing technologies, there was an upper limit to the amount of data our antecedent sonars could acquire and process. This meant that in the previous generation of sonars (3G and 4G series) when a signal was emitted, they returned a single range and intensity value per beam.
In the 5D Sonars we return multiple range and intensity values per beam (Full Time Series data). This new capability provides more information about the underwater environment.
In our 5D Sonars we return multiple range and intensity values per beam (Full Time Series data). This new capability provides more information about the underwater environment. 6D Sonars (Echoscope PIPE ® ) The Company’s 6D Sonars process and utilize much more of the data acquired by the sonar. 6D Sonars generate multiple real time 3D full time series images.
We also believe that the DAVD tethered system is poised to radically change the way diving operations are performed globally by providing a fully integrated suite of sensor data shared in real time by the dive supervisor on the surface and the diver.
In our industry we are widely considered the leading solution provider for underwater real time 3D visualization. 6 We also believe that the DAVD solution is poised to radically change the way diving operations are performed by providing a fully integrated suite of sensor data which can be shared in real time by the dive supervisor on the surface vessel and the diver by displaying the required data in the DAVD HUD.
The development and introduction of our F280 Series ® of GNSS Aided Inertial Positioning and Attitude Measurement System ® constitutes our new generation of Motion Products and gives us the opportunity to increase our market share.
The development and introduction of our F280 Series ® of GNSS Aided Inertial Positioning and Attitude Measurement System ® constitutes our new generation of Motion Products and gives us the opportunity to increase our market share. Real Time 3D/4D/5D and 6D Volumetric Sonar A significant portion of our revenue is generated from our Echoscope® technology.
In November 2021 Coda Octopus Products Limited established a subsidiary Coda Octopus Products (India) Private Limited intended to gain access to this market and to recruit critical resources for software development.
In November 2021 Coda Octopus Products Limited established a subsidiary Coda Octopus Products (India) Private Limited intended to gain access to this market and to recruit critical resources for software development. On October 29, 2024, we acquired into the Group, Precision Acoustics Limited, a company established under the laws of England.
Sales and Marketing We market our products primarily through our internal sales team, website, industry events such as trade shows, webinars, industry relationships and agents in foreign countries such as Japan, China and Korea. In addition, we have a network of non-exclusive independent global sales agents.
Sales and Marketing The Marine Technology Business markets its products through its internal sales team, website, industry events such as trade shows, webinars, live demonstrations of the technology, industry relationships and a network of non-exclusive agents in foreign countries such as Japan, China, Korea and South Africa.
Current diving is done largely by poor analog voice command missions from the topside using a disparate suite of systems for video data, communications, and positioning.
Current diving is done largely by poor analog voice command missions (with the diver supervisor on the surface providing verbal instructions to the diver underwater) using a disparate suite of systems for video data, communications, and positioning, which is not available to the diver firsthand.
This means that the DAVD tethered version is now a standard item available for purchase and for which budget lines are established within the various user commands within the Navy. To support the continued transfer of the DAVD system to field operations, we are involved in training the users.
This means that the DAVD tethered version is now a standard item available for purchase and for which budget lines can be established within the various user commands within the Navy. In the Current FY we continued our global marketing campaigns for the adoption of the DAVD tethered system outside of the US Navy.
We intend to continue our research and development activities to continually improve our products, seek new applications for our existing products, develop new innovative products and grow the market for our products and expertise.
We intend to continue our research and development activities to continually improve our products, seek new applications for our existing products, develop new innovative products and grow the market for our products and expertise. Diver Augmented Vision Display System (“DAVD”) A material portion of our revenue is generated from our DAVD technology.
In December 2002, Coda Octopus Ltd acquired OmniTech AS, a Norwegian corporation, which became a wholly owned subsidiary of the Company, and which subsequently changed its name to Coda Octopus R&D AS.
At the time of its acquisition, Octopus Marine Systems was producing geophysical products broadly similar to those of Coda, but targeted at the less sophisticated, easy-to-use, “workhorse” market. In December 2002, Coda Octopus Ltd acquired OmniTech AS, a Norwegian corporation, which became a wholly owned subsidiary of the Company, and which subsequently changed its name to Coda Octopus R&D A/S.
In the field of geophysical products, Triton Imaging Inc., a US-based company, now part of the ECA Group (Toulon, France), Chesapeake, a US-based company, and Oceanic Imaging Consultants, Hawaii, USA, dominate the market. 12 GNSS Aided Inertial Positioning and Attitude Measurement Systems (“Motion Products”) In the field of GNSS-aided inertial positioning and attitude sensing equipment, where our product addresses a small segment of the overall market, we believe that we have several principal competitors: Teledyne Technologies Inc.; Kongsberg Gruppen, iXblue, Applanix and SBG Systems.
In the field of GNSS-aided inertial positioning and attitude sensing equipment, where our product addresses a small segment of the overall market, we believe that we have several principal competitors: Teledyne Technologies Inc.; Kongsberg Gruppen, iXblue, Applanix and SBG Systems. We believe that our market share in this market segment of motion sensing equipment is relatively small.
Furthermore, a significant challenge for diving is the operating environment where zero visibility conditions typically prevail. Combining our DAVD with our Echoscope® removes this barrier for diving operations.
Examples of monocular and dual lens HMD include Shearwater Nerd 2, Tritech DMD (Diver Mounted Display) and Blueprint Subsea Artemis HMD. Furthermore, a significant challenge for diving is the operating environment where zero visibility conditions typically prevail. Combining our DAVD with our Echoscope® removes this barrier for diving operations.
It owns key proprietary technology comprising its real time volumetric imaging sonar technology (Echoscope® technology) and diving technology (“DAVD” or Diver Augmented Vision Display), both of which are applicable to the underwater defense and commercial markets. All innovations, design, development and manufacturing of our technology and solutions are performed within the Company with the exception of sub-component assemblies.
It owns key proprietary and unique technology comprising its real time volumetric imaging sonar technology (Echoscope ® technology) and diving technology (Diver Augmented Vision Display - “DAVD”), both of which are applicable to the underwater market, and which are used in the commercial offshore and defense sectors.
In other words, hardware, firmware and software operate as sub-systems to each other. We believe that the highly complex nature of this new technology will make it extremely difficult to reverse engineer our products. Pioneering this unique technology gives us a significant advantage over our competitors in the subsea real time 3D imaging sonar market sectors.
Our sonar innovations are multi-tiered and extend to hardware, firmware and software, all of which co-exist and are co-dependent on each other. In other words, hardware, firmware and software operate as sub-systems to each other. We believe that the highly complex nature of this new technology will make it extremely difficult to reverse engineer our sonar products.
It has the potential to radically change how diving operations are performed globally because it delivers real time information simultaneously to the divers underwater and their surface-based dive supervisors. It also allows diving operations to be performed in zero visibility water conditions which is a safety challenge for many diving operations.
The DAVD solution has the potential to radically change how diving operations are performed globally because it delivers real time information simultaneously to the divers underwater and their surface-based dive supervisors. The DAVD Head- Up Display (“HUD”) is used as a data portal for the diver while underwater.
Our Marine Engineering Businesses are suppliers of embedded solutions and sub-assemblies which they design and manufacture and sell into mission critical integrated defense systems. The Services Segment established its business in 1977 and has been supporting a number of significant defense programs of record for over 40 years, including Raytheon’s CIWS and Northrop Grumman’s Mine Hunting Systems Program.
The Services Segment established its business in 1977 and has been supporting a number of significant defense programs of record for over 40 years, including Raytheon’s Close in Weapon Support (CIWS) and Northrop Grumman’s Mine Hunting Systems Program (AQS-24) Program. The Services Segment’s business model entails engineering components for integration into broader defense programs, such as the CIWS program.
The Services Segment’s business model entails designing sub-assembly prototypes which are utilized in broader defense programs. These prototypes contracts typically lead to contracts for the manufacture, repair and upgrade of these sub-assemblies for the life of the program. We enjoy sole source status for the parts that we design and supply into these programs.
Typically, they supply prototypes units which are validated for integration and thereafter, subject to meeting the acceptance criteria, these lead to contracts for manufacture, repair and upgrade for the life of the program, which can span decades. We enjoy sole source status for the parts that we design and supply into these programs.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe building comprises both office space and manufacturing and testing facilities. The rent paid to Coda Octopus Products Limited is $53,803 per annum. All non-US Dollar denominated rents are stated according to prevailing exchange rates as of the date of each respective lease agreement.
Biggest changeThe lease is for a fixed period (with no provision for early termination) and expires on March 31, 2033. The annual rent for these premises is $58,350 per annum. All non-US Dollar denominated rents are stated according to prevailing exchange rates as of the date of each respective lease agreement.
ITEM 2. PROPERTIES Orlando, Florida Our corporate offices are co-located with our subsidiary Coda Octopus Products, Inc. in Orlando. We own these business premises comprising 3,000 square feet, that includes office space, training center and light manufacturing facilities.
ITEM 2. PROPERTIES Orlando, Florida Our corporate offices are co-located with our subsidiary Coda Octopus Products, Inc. in Orlando. We own these business premises comprising 3,000 square feet, that include office space, training center and light manufacturing facilities.
Annual rent is DKK 142,893 plus Value Added Tax (being an equivalent of $20,472) per annum) with an annual increase of 3%. Portland, Dorset, UK Martech uses premises owned by Coda Octopus Products Limited. These premises are located in the Marine Center in Portland, Dorset, United Kingdom, and comprise 9,890 square feet.
Annual rent is DKK 142,893 plus Value Added Tax (being an equivalent of $22,903) per annum) with an annual increase of 3%. Portland, Dorset, UK Martech uses premises owned by Coda Octopus Products Limited. These premises are located in the Marine Center in Portland, Dorset, United Kingdom, and comprise 9,890 square feet.
Copenhagen, Denmark Coda Octopus Products A/S, a Danish Subsidiary was established as as a mitigation strategy in relation to the UK leaving the European Union which has limited trade relations with EU member states. These premises are used as our European Offices. The lease is subject to six (6) months’ notice to terminate.
Copenhagen, Denmark Coda Octopus Products A/S, a Danish Subsidiary was established as a mitigation strategy in relation to the UK leaving the European Union which has limited trade relations with EU member states. It leases business premises comprising 1,450 square feet for its operations. The lease is subject to 6 months’ notice of termination.
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The building comprises both office space and manufacturing and testing facilities. The rent paid to Coda Octopus Products Limited is $59,109 per annum. Higher Bockhampton, Dorset, United Kingdom Precision Acoustics Limited leases business premises comprising 6,501 square feet used for both office space, manufacturing and testing facilities.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are currently not aware of any such legal proceedings that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results. ITEM 4. MINE SAFETY DISCLOSURES. Not Applicable. 17 PART II
Biggest changeWe are currently not aware of any such legal proceedings that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results. ITEM 4. MINE SAFETY DISCLOSURES. Not Applicable. 21 PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeITEM 4. MINE SAFETY DISCLOSURES 17 PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 18 ITEM 6. SELECTED FINANCIAL DATA 18 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 19
Biggest changeITEM 4. MINE SAFETY DISCLOSURES 21 PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 22 ITEM 6. SELECTED FINANCIAL DATA 22 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 23

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeYear Ended October 31, 2023 HIGH LOW First Quarter $ 8.22 $ 5.88 Second Quarter $ 8.19 $ 6.13 Third Quarter $ 11.09 $ 7.75 Fourth Quarter $ 8.76 $ 5.70 Year Ended October 31, 2022 HIGH LOW First Quarter $ 8.95 $ 6.49 Second Quarter $ 7.37 $ 5.60 Third Quarter $ 5.75 $ 4.77 Fourth Quarter $ 6.44 $ 4.85 We have not declared or paid any cash dividends on our common stock, and we currently intend to retain future earnings, if any, to finance the expansion of our business, and we do not expect to pay any cash dividends in the foreseeable future.
Biggest changeYear Ended October 31, 2024 HIGH LOW First Quarter $ 7.12 $ 5.21 Second Quarter $ 7.04 $ 5.26 Third Quarter $ 7.49 $ 5.86 Fourth Quarter $ 9.03 $ 6.80 Year Ended October 31, 2023 HIGH LOW First Quarter $ 8.22 $ 5.88 Second Quarter $ 8.19 $ 6.13 Third Quarter $ 11.09 $ 7.75 Fourth Quarter $ 8.76 $ 5.70 We have not declared or paid any cash dividends on our common stock, and we currently intend to retain future earnings, if any, to finance the expansion of our business, and we do not expect to pay any cash dividends in the foreseeable future.
The decision whether to pay cash dividends on our common stock will be made by our board of directors, in their discretion, and will depend on our financial condition, operating results, capital requirements and other factors that the board of directors considers significant. As of October 31, 2023, we had no authorized share repurchase programs.
The decision whether to pay cash dividends on our common stock will be made by our board of directors, in their discretion, and will depend on our financial condition, operating results, capital requirements and other factors that the board of directors considers significant. As of October 31, 2024, we had no authorized share repurchase programs.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeMarine Technology Business (“Products”) Marine Engineering Business (“Services”) Overhead Total Year Ended October 31, 2023 Net Revenues $ 12,119,066 $ 7,233,022 $ - $ 19,352,088 Cost of Revenues 2,819,796 3,501,237 - 6,321,033 Gross Profit 9,299,270 3,731,785 - 13,031,055 Research & Development 2,043,890 52,577 - 2,096,467 Selling, General & Administrative 3,109,566 2,463,087 2,622,383 8,195,036 Total Operating Expenses 5,153,456 2,515,664 2,622,383 10,291,503 Income (Loss) from Operations 4,145,814 1,216,121 (2,622,383 ) 2,739,552 Other Income (Expense) Other Income 39,146 - 39,146 Interest Income 544,892 97,638 - 642,530 Total Other Income (Expense) 584,038 97,638 - 681,676 Income (Loss) before Income Taxes 4,729,852 1,313,759 (2,622,383 ) 3,421,228 Income Tax (Expense) Benefit Current Tax (Expense) Benefit (272,126 ) (78,876 ) 102,347 (248,655 ) Deferred Tax Benefit (Expense) (115,954 ) 54,382 13,148 (48,424 ) Total Income Tax (Expense) Benefit (388,080 ) (24,494 ) 15,494 (297,079 ) Net Income (Loss) $ 4,341,772 $ 1,289,265 $ (2,506,889 ) $ 3,124,149 Supplemental Disclosures Total Assets $ 36,969,673 $ 13,604,262 $ 1,267,581 $ 51,841,516 Total Liabilities $ 2,263,761 $ 732,582 $ 416,407 $ 3,412,750 Revenues from Intercompany Sales - eliminated from sales above $ 4,602,741 $ 584,622 $ 1,200,000 $ 6,387,363 Depreciation and Amortization $ 523,339 $ 100,689 $ 43,502 $ 667,530 Purchases of Long-lived Assets $ 1,996,544 $ 25,404 $ 108,392 $ 2,130,340 30 Marine Technology Business (“Products”) Marine Engineering Business (“Services”) Overhead Total Year Ended October 31, 2022 Net Revenues $ 14,724,688 $ 7,501,115 $ - $ 22,225,803 Cost of Revenues 2,941,569 4,093,546 - 7,035,115 Gross Profit 11,783,119 3,407,569 - 15,190,688 Research & Development 2,207,500 30,420 - 2,237,920 Selling, General & Administrative 2,563,554 2,654,565 2,730,585 7,948,704 Total Operating Expenses 4,771,054 2,684,985 2,730,585 10,186,624 Income (Loss) from Operations 7,012,065 722,584 (2,730,585 ) 5,004,064 Other Income (Expense) Other Income 55,715 79,204 3,056 137,975 Interest Expense (9,233 ) (71 ) (400 ) (9,704 ) Total Other Income (Expense) 46,482 79,133 2,656 128,271 Income (Loss) before Income Taxes 7,058,547 801,717 (2,727,929 ) 5,132,335 Income Tax (Expense) Benefit Current Tax Benefit (Expense) (868,162 ) 39,422 (176,400 ) (1,005,140 ) Deferred Tax (Expense) Benefit 31,907 (41,657 ) 183,776 174,026 Total Income Tax (Expense) Benefit (836,255 ) (2,235 ) 7,376 (831,114 ) Net Income (Loss) $ 6,222,292 $ 799,482 $ (2,720,553 ) $ 4,301,221 Supplemental Disclosures Total Assets $ 33,348,805 $ 12,662,109 $ 916,544 $ 46,927,458 Total Liabilities $ 2,432,750 $ 526,195 $ 585,704 $ 3,544,649 Revenues from Intercompany Sales - eliminated from sales above $ 2,406,717 $ 396,015 $ 2,720,000 $ 5,522,732 Depreciation and Amortization $ 602,583 $ 96,776 $ 39,370 $ 738,729 Purchases of Long-lived Assets $ 1,123,475 $ 36,862 $ 90,887 $ 1,251,224 The Company’s reportable business segments sell their goods and services in four geographic locations: ● Americas ● Europe ● Australia/Asia ● Middle East/Africa 31 Liquidity and Capital Resources As of October 31, 2023, the Company had an accumulated deficit of $11,052,487, working capital of $37,608,719 and stockholders’ equity of $48,428,766.
Biggest changeProducts Services Overhead Total Year Ended October 31, 2024 Net Revenues $ 12,806,603 $ 7,509,558 $ - $ 20,316,161 Cost of Revenues 2,824,541 3,318,515 - 6,143,056 Gross Profit 9,982,062 4,191,043 - 14,173,105 Research & Development 2,019,112 223,317 - 2,242,429 Selling, General & Administrative 3,814,860 2,248,493 2,283,192 8,346,545 Total Operating Expenses 5,833,972 2,471,810 2,283,192 10,588,974 Income (Loss) from Operations 4,148,090 1,719,233 (2,283,192 ) 3,584,131 Other Income Other Income 53,960 34,422 - 88,382 Interest Income 657,817 198,239 82,719 938,775 Total Other Income 711,777 232,661 82,719 1,027,157 Income (Loss) before Income Taxes 4,859,867 1,951,894 (2,200,473 ) 4,611,288 Income Tax Expense Current Tax Expense 316,955 169,374 227,341 713,670 Deferred Tax Expense (Benefit) (5,655 ) 19,169 238,108 251,622 Total Income Tax Expense 311,300 188,543 465,449 965,292 Net Income (Loss) $ 4,548,567 $ 1,763,351 $ (2,665,922 ) $ 3,645,996 Supplemental Disclosures *Total Assets $ 40,922,453 $ 13,404,567 $ 3,217,524 $ 57,544,544 *Total Liabilities $ 3,072,876 $ 842,450 $ 500,695 $ 4,416,021 Revenues from Intercompany Sales - eliminated from sales above $ 3,367,839 $ 238,143 $ 1,266,000 $ 4,871,982 Depreciation and Amortization $ 632,882 $ 88,166 $ 49,487 $ 770,535 Purchases of Long-lived Assets $ 345,191 $ 23,786 $ 89,103 $ 458,079 * The Total Assets and Total Liabilities included in the Supplemental Disclosures include PAL 35 Products Services Overhead Total Year Ended October 31, 2023 Net Revenues $ 12,119,066 $ 7,233,022 $ - $ 19,352,088 Cost of Revenues 2,819,796 3,501,237 - 6,321,033 Gross Profit 9,299,270 3,731,785 - 13,031,055 Research & Development 2,043,890 52,577 - 2,096,467 Selling, General & Administrative 3,109,566 2,463,087 2,622,383 8,195,036 Total Operating Expenses 5,153,456 2,515,664 2,622,383 10,291,503 Income (Loss) from Operations 4,145,814 1,216,121 (2,622,383 ) 2,739,552 Other Income Other Income 39,146 - - 39,146 Interest Income 544,892 97,638 - 642,530 Total Other Income 584,038 97,638 - 681,676 Income (Loss) before Income Taxes 4,729,852 1,313,759 (2,622,383 ) 3,421,228 Income Tax Expense (Benefit) Current Tax Expense (Benefit) 272,126 78,876 ( 102,347 ) 248,655 Deferred Tax Expense (Benefit) 115,954 ( 54,382 ) ( 13,148 ) 48,424 Total Income Tax Expense (Benefit) 388,080 24,494 ( 115,495 ) 297,079 Net Income (Loss) $ 4,341,772 $ 1,289,265 $ (2,506,888 ) $ 3,124,149 Supplemental Disclosures Total Assets $ 36,969,673 $ 13,604,262 $ 1,267,581 $ 51,841,516 Total Liabilities $ 2,263,761 $ 732,582 $ 416,407 $ 3,412,750 Revenues from Intercompany Sales - eliminated from sales above $ 4,602,741 $ 584,622 $ 1,200,000 $ 6,387,363 Depreciation and Amortization $ 523,339 $ 100,689 $ 43,502 $ 667,530 Purchases of Long-lived Assets $ 1,996,544 $ 25,404 $ 108,392 $ 2,130,340 The Company’s reportable business segments sell their goods and services in four geographic locations: ● Americas ● Europe ● Australia/Asia ● Middle East/Africa 36 Liquidity and Capital Resources As of October 31, 2024, the Company had an accumulated deficit of $7,406,491, working capital of $39,084,999 and stockholders’ equity of $53,128,523.
We annually evaluate the recoverability of goodwill and intangible assets and carefully consider events or circumstances that warrant revised estimates of useful lives or that indicate that impairment exists. Step 1 of the goodwill impairment test used to identify potential impairment compares the fair value of the reporting unit with its’ carrying amount, including goodwill.
We evaluate annually the recoverability of goodwill and intangible assets and carefully consider events or circumstances that warrant revised estimates of useful lives or that indicate that impairment exists. Step 1 of the goodwill impairment test used to identify potential impairment compares the fair value of the reporting unit with its’ carrying amount, including goodwill.
At the end of each year, we evaluate goodwill on a separate reporting unit basis to assess recoverability, and impairments, if any, are recognized in earnings. An impairment loss would be recognized in an amount equal to the excess of the carrying amount of the reporting unit compared to the fair value of the reporting unit.
At the end of each financial year, we evaluate goodwill on a separate reporting unit basis to assess recoverability, and impairments, if any, are recognized in earnings. An impairment loss would be recognized in an amount equal to the excess of the carrying amount of the reporting unit compared to the fair value of the reporting unit.
All design, development and manufacturing of our technology and solutions are performed within the Company. We sell our products and solutions globally and have a combination of direct sales and indirect sales (via our agents’ network). In Asia and Africa, we largely sell via agents, in the USA, Europe and the Middle East we sell directly.
All design, development and manufacturing of our technology and solutions are performed within the Company. We sell our products and solutions globally and have a combination of direct sales and indirect sales (via our agents’ network). In Asia and Africa, we largely sell via agents while in the USA, Europe and the Middle East we sell directly.
GAAP. Goodwill and Intangible Assets Goodwill and intangible assets consist principally of the excess of cost over the fair value of net assets acquired (i.e., goodwill), customer relationships, non-compete agreements and licenses. Goodwill was allocated to our reporting units based on the original purchase price allocation.
GAAP. Goodwill and Intangible Assets Goodwill and intangible assets consist principally of the excess of cost over the fair value of net assets acquired (i.e., goodwill), customer relationships, value of technology, non-compete agreements and licenses. Goodwill was allocated to our reporting units based on the original purchase price allocation.
In addition, our general costs of operations have increased along with raw material costs for our products and solutions. Inflation is also an inherently destabilizing factor for both retaining staff and recruiting staff and therefore impacts on our business plans and the effectiveness of our workforce.
In addition, our general costs of operations have increased along with raw material costs for our products and solutions. Inflation is also an inherently destabilizing factor for both retaining staff and recruiting staff and therefore impacts on our business plans and the effectiveness of our assembled workforce.
As a small business, we are hindered in our ability to compete for certain specialized electronic engineering skills or technology skills, as our remuneration package is not as competitive as those offered by bigger companies which are competing for the same skills. G.
Furthermore, as a small business, we are hindered in our ability to compete for certain specialized electronic engineering skills or technology skills, as our remuneration package is not as competitive as those offered by bigger companies which are competing for the same skills. G.
Our current cash balance represents approximately 36 months of Selling, General and Administrative Expenses. The Company continues to critically evaluate the level of expenses that it incurs and reduces its expenses as may be appropriate within its business priorities. We also have access to a revolving line of credit of $4 million from HSBC NA.
Our current cash balance represents approximately 33 months of Selling, General and Administrative Expenses. The Company continues to critically evaluate the level of expenses that it incurs and reduces its expenses as may be appropriate within its business priorities. We also have access to a revolving line of credit of $4 million from HSBC NA.
It has been operating as a supplier of solutions comprising both hardware and software products for close to 30 years to this market and it owns key proprietary technology including its Echoscope® and DAVD technology, that are used in both the underwater defense and commercial markets.
It has been operating as a supplier of solutions comprising both hardware and software products for over 30 years to this market and it owns key proprietary technology including its Echoscope ® and DAVD technology, that are used in both the underwater defense and commercial markets.
An example of new technology entering the subsea market is LIDAR technology. However, unlike our sonar technology, LIDAR technology cannot be employed in zero visibility conditions and cannot generate a volume pulse or image moving objects required for real time inspection and monitoring underwater. I.
An example of new technology entering the subsea market is lidar technology. However, unlike our sonar technology, Lidar technology cannot be employed in zero visibility conditions and cannot generate a volume pulse or image moving objects required for real time inspection and monitoring underwater. H.
Foreign Currency Translations as they pertain to our assets and liabilities are translated at the prevailing exchange rate at the balance sheet date and related revenue and expenses are translated at weighted average exchange rates in effect during the 12-month reporting period.
Foreign Currency translations as they pertain to our assets and liabilities are translated at the prevailing exchange rate at the balance sheet date and related revenue and expenses are translated using the average exchange rates in effect during the 12-month reporting period.
Revenue from the sale of services is recognized when those services have been provided to the customer and evidence of the provision of those services exists. For further discussion of our revenue recognition accounting policies, refer to “Note 4 Revenue Recognition” in our Consolidated Financial Statements.
Revenue from the sales of services is recognized when those services have been provided to the customer and evidence of the provision of those services exists. For further discussion of our revenue recognition accounting policies, refer to “Note 4 Revenue Recognition” in our Consolidated Financial Statements.
Goodwill is not amortized and is evaluated for impairment annually or more often if circumstances indicate impairment may exist. Customer relationships, non-compete agreements, patents and licenses are being amortized on a straight-line basis over periods of 2 to 15 years. The Company amortizes its intangible assets using the straight-line method over their estimated period of benefit.
Goodwill is not amortized and is evaluated for impairment annually or more often if circumstances indicate impairment may exist. Customer relationships, value of technology, non-compete agreements, patents and licenses are amortized on a straight-line basis over periods of 2 to 15 years. The Company amortizes its intangible assets using the straight-line method over their estimated period of benefit.
Fluctuations in currency exchange rates can directly impact on the Company’s sales, profitability and financial position when the transactions of the foreign subsidiaries are translated from their functional currencies into USD for financial reporting.
Fluctuations in currency exchange rates can directly (positively and negatively) impact on the Company’s sales, profitability and financial position when the transactions of the foreign subsidiaries are translated from their functional currencies into USD for financial reporting.
See Table under the section of the MD&A which concerns “Foreign Currency & Inflation”, and which shows the impact of the currency adjustments on our Income Statement and Balance Sheet in 2023 FY compared to 2022 FY. 29 Segment Analysis We operate in two reportable segments, (“Products Business” and “Service Business”) which are managed separately based upon fundamental differences in their operations.
See Table under the section of the MD&A which concerns “Foreign Currency & Inflation”, and which shows the impact of the currency adjustments on our Income Statement and Balance Sheet in 2024 FY compared to 2023 FY. 34 Segment Analysis We operate two reportable segments, “Products Business” and “Service Business” which are managed separately based upon fundamental differences in their operations.
“Note 10 Income Taxes” to the Consolidated Financial Statements discusses the amounts of deferred tax assets and liabilities, and also presents the impact of significant differences between financial reporting income and taxable income. 23 For income tax purposes, the Company uses the percentage of completion method of recognizing revenues on long-term contracts which is consistent with the Company’s financial reporting under U.S.
“Note 11 Income Taxes” to the Consolidated Financial Statements discusses the amounts of deferred tax assets and liabilities and also presents the impact of significant differences between financial reporting income and taxable income. 28 For income tax purposes, the Company uses the percentage of completion method of recognizing revenues on long-term contracts which is consistent with the Company’s financial reporting under U.S.
See “Note 2 Summary of Accounting Policies” (Foreign Currency Translation) of our audited Consolidated Financial Statements as of October 31, 2023, for more information on the applicable rates used for our Balance Sheet transactions and Statement of Income and Comprehensive Income.
See “Note 2 Summary of Accounting Policies” (Foreign Currency Translation) of our audited Consolidated Financial Statements as of October 31, 2024, for more information on the applicable rates used for our Balance Sheet transactions and Statements of Income and Comprehensive Income.
See “Note 2 Summary of Accounting Policies” (Cost of Revenue), “Notes 14 Segment Analysis” and “Note 15 Disaggregation of Revenue” of our audited Consolidated Financial Statements as of October 31, 2023, for more information covering commissions as a component of Cost of Revenues, segment reporting and the disaggregation of our revenues by type and geography, respectively. ● Level of assets in the rental pool and Cost of Revenue associated with these rental assets – see “Note 2 Summary of Accounting Policies” (Cost of Revenue).
See “Note 2 Summary of Accounting Policies” (Cost of Revenue), “Note 15 Segment Analysis” and “Note 16 Disaggregation of Revenue” of our audited Consolidated Financial Statements as of October 31, 2024, for more information covering commissions as a component of Cost of Revenues, segment reporting and the disaggregation of our revenues by type and geography, respectively. ● Level of assets in the rental pool and Cost of Revenue associated with these rental assets – see “Note 2 Summary of Accounting Policies” (Cost of Revenue).
For Balance Sheet Transactions Constant Rate means: The prevailing exchange rate as of October 31, 2023, when compared to prevailing exchange rate as of October 31, 2022.
For Balance Sheet Transactions Constant Rate means: The prevailing exchange rate as of October 31, 2024, when compared to prevailing exchange rate as of October 31, 2023.
Significant currency fluctuations (particularly the British Pound and/or the Danish Kroner, Euros, versus the US Dollar) may affect our financial results including our profit and loss account and the value of our assets and therefore we are subject to foreign currency fluctuation risks.
Significant currency fluctuations (particularly the British Pound and/or the Danish Kroner, Euros, against the US Dollar) may (positively or negatively) affect our financial results including our profit and loss account and the value of our assets and therefore we are subject to foreign currency fluctuation risks.
Although the Services Business works with sales agents this is on a lesser scale than the Marine Technology Business and typically commission costs incurred by the Services Business are very low.
Although the Services Business works with sales agents this is on a lesser scale than the Marine Technology Business and typically commission costs incurred by the Services Business are immaterial.
In addition, a significant part of our assets and liabilities (both current and fixed) is held in British Pounds, Danish Kroner and Euros by these foreign subsidiaries.
In addition, a significant part of our assets and liabilities is held in British Pounds, Danish Kroner and Euros by these foreign subsidiaries.
Comparison of fiscal year ended October 31, 2023, to fiscal year ended October 31, 2022 The information provided below pertains to the Company’s consolidated financial results.
Comparison of fiscal year ended October 31, 2024, to fiscal year ended October 31, 2023 The information provided below pertains to the Company’s consolidated financial results of operations.
Limitations of current diving operations are that the diver only shares analog voice communications with the topside, is subject to the topside verbally describing information, and there is no real time information including real time navigation, tracking and mapping of the dive area available to the diver. The topside must also manage several independent systems for video, communications, and positioning.
Limitations of current diving operations are that the diver only shares analog voice communications with the dive supervisor on the surface, instructions are relayed verbally, and there is no real time information including real time navigation, tracking and mapping of the dive area available to the diver. The topside must also manage several independent systems for video, communications, and positioning.
Foreign Currency and Inflation The Company and its subsidiaries maintain their accounts in the native currencies of their operations, and which are: US Dollars For US Operations British Pound For United Kingdom Operations Danish Kroner For Danish Operations Australian Dollars For Australian Operations (operations are currently dormant) Indian Rupees For Indian Operations (operations are currently dormant) The Company’s consolidated financial results therefore include the translation of its subsidiaries functional currencies into U.S Dollar.
The foreign subsidiaries maintain their accounts in the native currencies of their operations, and which are: US Dollars For US Operations British Pound For United Kingdom Operations Danish Kroner For Danish Operations Australian Dollars For Australian Operations (operations are currently dormant) Indian Rupees For Indian Operations (operations are currently dormant) The Company’s consolidated financial results therefore include the translation of its foreign subsidiaries functional currencies into USD.
Exceptionally, a subsidiary may perform financial transactions in currencies other than its native or functional currency (purchasing inventory from a foreign supplier, for example, in foreign currency). Furthermore, the Company holds significant cash balances in foreign currencies, such as British Pound, Euro and Danish Kroner.
Exceptionally, a subsidiary may perform financial transactions in foreign currencies (such as purchasing inventory from a foreign supplier, for example, in foreign currency). Furthermore, the Company holds significant cash balances in foreign currencies, such as British Pound, Euro and Danish Kroner.
This section of this Form 10-K generally discusses fiscal 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
This section of Form 10-K discusses fiscal 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
Both the Marine Technology Business and Marine Engineering Business have established synergies in terms of customers and specialized engineering skill sets (hardware, firmware, and software) encompassing capturing, computing, processing and displaying data in harsh environments. Factors Affecting our Business. Our business is affected by a number of factors including those set out below: A.
These business units have established synergies in terms of customers and specialized engineering skills sets (hardware, firmware, and software) encompassing capturing, computing, processing and displaying data in harsh environments. Factors Affecting our Business. Our business is affected by a number of factors including those set out below: A.
These include: ● The percentage of our consolidated sales that is attributable to the Marine Technology Business versus the Services Business. The Gross Profit Margin yielded by the Products Business is generally higher than that of the Engineering Business. ● The percentage of our consolidated sales that is attributable to the Services Business.
The Gross Profit Margin yielded by the Marine Technology Business is generally higher than that of the Services Business. ● The percentage of our consolidated sales that is attributable to the Services Business.
In addition, the Services Business incurs research and development expenses on advancing its Thermite ® Octal range of mission computer products with the strategic goals of increasing and diversifying its revenues and improving gross profit margins. In the 2023 FY this category of expenditure decreased by 6.3%.
In addition, the Services Business incurs research and development expenses on advancing its Thermite ® Octal range of mission computer products with the strategic goals of increasing and diversifying its revenues and improving gross profit margins. In the 2024 FY this category of expenditure increased by 7.0%.
Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-K, filed with the SEC on January 30, 2023, which is available free of charge on the SEC’s website at www.sec.gov and our Investor Relations website at codaoctopusgroup.com.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-K, filed with the SEC on January 30, 2023, which is available free of charge on the SEC’s website at www.sec.gov and our Investor Relations website at www.codaoctopusgroup.com General Overview We operate two distinct business segments: the Products Segment and Services Segment.
These proprietary sub-assemblies, once approved within the MCIS program, afford the Services Business the status of preferred supplier. Such status permits it to supply these sub-assemblies and upgrades in the event of obsolescence or advancement of technology for the life of the MCIS program. Customers include prime defense contractors such as Raytheon, Northrop Grumman, Thales Underwater and BAE Systems.
Such status permits it to supply these sub-assemblies and upgrades in the event of obsolescence or advancement of technology for the life of the MCIS program. Customers include prime Defense contractors such as Raytheon, Northrop Grumman, Thales Underwater and BAE Systems.
The DAVD system which embeds a pair of transparent glasses in the Head up Display (HUD) is used as the data hub for displaying comprehensive real time data to the diver underwater. This also allows both the diver and the dive supervisor to visualize in real time the same underwater scene and data.
The DAVD system which embeds a pair of transparent glasses in the HUD is used as the data hub for displaying comprehensive real time data to the diver underwater including augmented reality data. DAVD technology allows both the diver and the dive supervisor to visualize in real time the same underwater scene and data.
High inflation affects our business in a number of areas including costs of operations, including wages and salaries which have increased in relation to the number of staff in the Current FY (which has reduced) compared to the number of staff in the Previous FY.
Impacts on our ability to compete for key skills required for our Business High inflation affects our business in a number of areas including costs of operations, including wages and salaries which have increased in relation to the number of staff in the Current FY (which has reduced) compared to the number of staff in the Previous FY.
This line of credit is available to the Company for short-term working capital purposes. All amounts under the Revolving Line of Credit are payable at the end of each financial year. The facility was renewed for another year until November 2024. To date, the Company has not had reason to borrow any funds for its operations under this credit line.
This line of credit is available to the Company for short-term working capital purposes. All amounts under the Revolving Line of Credit are payable at the end of each financial year. The facility was extended for another year until November 2025. To date, the Company has not borrowed any funds under this credit line.
Recently inflation has been falling in these countries and in the twelve months to October 31, 2023, these were: Ø Denmark 0.1% - source: Statistics Denmark, Ø UK 4.7% - source: Office of National Statistics (ONS); and Ø USA 3.2% - source: U.S. Bureau of Labor Statistics.
Recently inflation has been falling in these countries but remain volatile and in the twelve months to October 31, 2024, these were: Denmark 1.6% - source: Statistics Denmark, UK 3.2% - source: Office of National Statistics (ONS); and USA 2.6% - source: U.S. Bureau of Labor Statistics.
Our imaging sonar technology products and solutions marketed under the name of Echoscope ® and Echoscope PIPE ® are used primarily in the underwater construction market, offshore renewables, offshore oil and gas, forward looking obstacle avoidance, complex underwater mapping, salvage operations, dredging, bridge inspection, underwater hazard detection, port and harbor security, mining, mine counter measures, ship hull scanning, real time threat detection, fisheries, commercial and defense diving, and marine sciences sectors.
Our imaging sonar technology products and solutions marketed under the name of Echoscope ® and Echoscope PIPE ® are used in a wide range of underwater construction activities (which include real time monitoring, placements or decommissioning), offshore renewables, offshore oil and gas, forward looking obstacle avoidance, complex underwater mapping, salvage operations, dredging, bridge inspection, underwater hazard detection, port and harbor security, mining, mine counter measures, ship hull scanning, real time threat detection, robotics and 3D perception applications, fisheries, commercial and defense diving, and marine sciences sectors.
The recent change in both the US and UK Governments’ political stance (and to a lesser extent the European Union Member States) towards trade with China, directly affects the sale of our products to customers based in China.
The recent change in both the US and UK Governments’ political stance towards trade with China, directly affects the sale of our products to customers based in China.
Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements. Inflation Inflation affects our Business in several ways including: Ø Cost of Operations (including wages, salaries, utilities) Ø Bill of Material (BOM) Costs of our Products Ø Our revenue – as an inflationary environment reduces demand for our goods and services.
Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements. Inflation Inflation affects our Business in several ways including: Cost of Operations (including wages, salaries, utilities) and therefore our overheads. Bill of Material (BOM) Costs of our Products and Input Materials for Engineering Services. Our revenue. An inflationary environment is likely to reduce demand for our goods and services.
The assets utilized for our rental offering are subject to depreciation, a portion of which is allocated to Cost of Revenue. In the 2023 FY gross profit margins for the Marine Technology Business were 76.7% compared to 80.0% in the 2022 FY. For the Engineering Business, these were 51.6% in the 2023 FY compared to 45.4% in the 2022 FY.
The assets utilized for our rental offering are subject to depreciation, a portion of which is allocated to Cost of Revenue. In the 2024 FY gross profit margins for the Marine Technology Business were 77.9% compared to 76.7% in the 2023 FY. For the Services Business, these were 55.8% in the 2024 FY compared to 51.6% in the 2023 FY.
Notable factors in our SG&A 2023 FY are: Within the category of SG&A we have transactions which are cash charges and non-cash charges. The non-cash charges comprise Depreciation, Amortization, Stock-based compensation charges and Exchange Rate Variance. In 2023 FY and 2022 FY, respectively non-cash items as a percentage of SGA expenses were 15.6% and 15.1%, respectively.
Notable factors in our SG&A expenses for the 2024 FY are: SG&A expenses include transactions which are cash charges and non-cash charges. The non-cash charges comprise Depreciation, Amortization, Stock-based compensation charges, Exchange Rate Variance and Credit Losses Allowance. In 2024 FY and 2023 FY, respectively, non-cash items as a percentage of SGA expenses were 12.4% and 15.6%, respectively.
Segment operating income is total Segment revenue reduced by cost of revenues and operating expenses (research and development and Selling, General & Administrative) identifiable with the reporting business segment. Overheads include general corporate administrative costs. The Company evaluates performance and allocates resources based upon operating income.
Segment operating income is total segment revenue reduced by cost of revenues and operating expenses, Research and Development (“R&D”), and Selling, General & Administrative (“SG&A”) identifiable with the reporting business segment. Overheads include general corporate administrative costs.
Another critical part of our solution is that by using the Company’s Echoscope ® technology, diving can be performed in zero visibility conditions, a common problem which besets these operations and can result in significant costs to the offshore service provider. 19 Although we generate most of our revenues from our real time 3D sonar which includes both proprietary hardware and software and the DAVD, we have a number of other products which we supply to the marine offshore market such as our inertial navigation systems (F280 Series ® ) and our geophysical hardware (DA4G) and software solutions (GeoSurvey which is widely used in the Oil & Gas sector and Survey Engine®, which include artificial intelligence based automatic detection systems).
Another critical part of our solution is that by using the Company’s Echoscope ® technology, diving can be performed in zero visibility conditions, a common problem which besets these operations and can result in significant costs to the offshore service provider. 23 Although we generate most of our revenues from our range of real time 3D sonars and DAVD, we have a number of other products which we supply to the marine offshore market such as our F280 Series ® , DA4G, GeoSurvey and Survey Engine ® .
For the year then ended, the Company generated cash flow from operations of $2,389,876. We believe that our current level of cash and cash generation will be sufficient to meet our short and medium-term liquidity needs. As of October 31, 2023, we had cash and cash equivalents on hand of $24,448,841 and both billed and unbilled receivables of $3,537,712.
For the year then ended, the Company generated cash flow from operations of $2,451,675. We believe that our current level of cash and cash generation will be sufficient to meet our short and medium-term liquidity needs. As of October 31, 2024, we had cash and cash equivalents on hand of $22,479,072 and both billed and unbilled receivables of $5,151,290.
Our consolidated results include the results of the Company’s foreign subsidiaries. Our Foreign subsidiaries’ results are translated from their respective functional currencies into United States Dollar (USD) for reporting purposes. Currency fluctuations can therefore impact on our consolidated results including revenue and our profitability.
Our consolidated results of operations include the results of the Company’s foreign subsidiaries. Our foreign subsidiaries’ results are translated from their respective functional currencies into United States Dollar (USD) for reporting purposes.
This is a further impediment for our customers and makes selling into these markets more challenging. Ø Because we have to set up various offices in the European Union member state countries to gain seamless access to these markets, it increases the cost of our operations and therefore our overheads without any corollary increase in sales to defray these costs. 20 B.
Because we have to set up various offices in the European Union member state countries to gain seamless access to these markets (Denmark and the Netherlands), it increases the cost of our operations and therefore our overheads without any corollary increase in sales to defray these costs.
In the 2022 FY we recorded a loss of $3,070,065 on foreign currency translation adjustment transactions compared to a gain of $1,294,575 in the 2023 FY.
In 2024 FY we recorded a lower gain of $931,718 on foreign currency translation adjustment transactions compared to a gain of $1,294,575 in the 2023 FY.
This is likely to further postpone approval of budgets and apportionments of funds, which is likely to affect our business. H. Technological Advancement A significant part of our growth strategy is predicated on our flagship real time volumetric imaging sonar technology, the Echoscope® and our Diver Augmented Vision Display (DAVD) solution.
Technological Advancement A significant part of our growth strategy is predicated on our flagship real time volumetric imaging sonar technology, the Echoscope® and our Diver Augmented Vision Display (DAVD) solution.
In the 2023 FY, the Company and its US subsidiaries had a lower percentage of taxable income than the Company’s foreign subsidiaries, while the Company’s UK and Danish subsidiaries had taxable income in their respective tax jurisdictions.
In the 2024 FY, the Company and its US subsidiaries had a lower percentage of taxable income (due to lower sales caused by reduced Defense funding allocation) than the Company’s foreign subsidiaries, while the Company’s UK and Danish subsidiaries had a higher percentage of taxable income in their respective tax jurisdictions.
Furthermore, our revenue was affected in strategic markets and geographies due to inflationary pressures which reduced the demand for our technology and solutions. 33 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable.
Furthermore, our revenue continues to be affected in strategic markets and geographies due to inflationary pressures which have made the pricing for our solutions unattractive for those markets. 38 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable.
Government Spending for Defense We are dependent on the timely allocation of funds to defense procurement by governments in the United States and the United Kingdom. A large part of our revenues in the Services Segment derives from government funding in the defense sector.
Reduced Funding Available for Defense Programs resulting from the use of Continuing Resolutions to authorize ongoing spending under Defense Programs We are dependent on the timely allocation of funds to defense procurement by governments in the United States and the United Kingdom. A large part of our revenues is derived from government funding in the Defense sector.
Overhead related costs as a percentage of revenue for the year ended October 31, 2023, compared to the year ended October 31, 2022 Our overhead SG&A expenditures are constituted of general corporate administrative costs.
Overhead related costs as a percentage of revenue for the year ended October 31, 2024, compared to the year ended October 31, 2023 Our overhead SG&A expenditures comprise general corporate administrative costs. Overhead SG&A as a percentage of revenue decreased by 2.4% and was 11.2%.
Comprehensive Income for the year ended October 31, 2023, compared to the year ended October 31, 2022 Year Ended October 31, 2023 Year Ended October 31, 2022 Percentage Change $ 4,418,724 $ 1,231,156 Increase of 258.9% In the 2023 FY Comprehensive income was $4,418,724 compared to $1,231,156 for the 2022 FY.
Comprehensive Income for the year ended October 31, 2024, compared to the year ended October 31, 2023 Year Ended October 31, 2024 Year Ended October 31, 2023 Percentage Change $ 4,577,714 $ 4,418,724 Increase of 3.6% In the 2024 FY Comprehensive income was $4,577,714 compared to $4,418,724 for the 2023 FY.
These increases may make the cost of making our products uncompetitive and may also affect our margins. F. Shortage of Key Skills/Resourcing Levels and significant increase in cost of operations due to inflation We are experiencing skill shortages in areas that are critical to our growth strategy including experienced sales and marketing personnel, software developers and skilled electronic technicians.
These increases may make the costs of our products uncompetitive and affect demand and margins. F. Shortage of Key Skills/Resourcing Levels and significant increase in cost of operations due to inflation We are experiencing skill shortages in areas that are critical for our business operations.
The Company cannot predict the extent to which currency fluctuations may affect its business and financial position, and there is a risk that such fluctuations may have an adverse impact on the Company’s sales, profits and financial position. 32 Applying the Constant Rate (as the term is defined immediately below), the impact of currency fluctuations in the 2023 FY compared with the 2022 FY, is shown below.
The Company cannot predict the extent to which currency fluctuations may affect its business and financial position, and there is a risk that such fluctuations may have an adverse impact on the Company’s sales, profits and financial position.
Income before Income Tax Expense for the year ended October 31, 2023, compared to the year ended October 31, 2022 Year Ended October 31, 2023 Year Ended October 31, 2022 Percentage Change $ 3,421,228 $ 5,132,335 Decrease of 33.3% In the 2023 FY, we had income before income taxes of $3,421,228 as compared to $5,132,335 in the 2022 FY, representing a decrease of 33.3%.
Income before Income Tax Expense for the year ended October 31, 2024, compared to the year ended October 31, 2023 Year Ended October 31, 2024 Year Ended October 31, 2023 Percentage Change $ 4,611,288 $ 3,421,228 Increase of 34.8% In the 2024 FY, we had income before income taxes of $4,611,288 as compared to $3,421,228 in the 2023 FY, representing an increase of 34.8%.
For information on the performance of each Segment including the disaggregation of revenues and geographical split, see “Note 14 Segment Analysis” and “Note 15 Disaggregation of Revenue” of our audited Consolidated Financial Statements as of October 31, 2023, and 2022. 25 Revenue: Year Ended October 31, 2023 Year Ended October 31, 2022 Percentage Change $ 19,352,088 $ 22,225,803 Decrease of 12.9% We realized a decrease in our consolidated revenues of 12.9% in the 2023 FY compared to the 2022 FY.
For information on the performance of each Segment including the disaggregation of revenues and geographical split, see “Note 15 Segment Analysis” and “Note 16 Disaggregation of Revenue” of our audited Consolidated Financial Statements as of October 31, 2024, and 2023. 30 Revenue: Year Ended October 31, 2024 Year Ended October 31, 2023 Percentage Change $ 20,316,161 $ 19,352,088 Increase of 5.0% Our consolidated revenues increased by 5.0% in the 2024 FY when compared to the 2023 FY.
Coda Octopus Products constitute the Marine Technology Business (“Products Segment”) is a supplier to the underwater/subsea market and selling both hardware and software solutions which includes imaging sonar technology solutions, diving technology, geophysical products, rental equipment, customization, and field operations services.
The Marine Technology Business is a supplier to the underwater/subsea market and sells both hardware and software solutions which include imaging sonar technology solutions, diving and diving communications technology, geophysical products, rental equipment, customization, and field operations services. PAL is a supplier of products to the ultrasound, acoustic measurement and NDT markets.
This is in keeping with our strategy to shift our focus to business development, marketing, and brand building. Expenditures in this area are spent on industry-related trade shows and events, demonstrations particularly on the DAVD market adoption and technology awareness campaigns, marketing events and customer visits.
Expenditures in this area are spent on industry-related trade shows and events, demonstrations particularly on the DAVD market adoption and technology awareness campaigns, marketing events and customer visits and fees relating to the US Focus Group we retained to assist us in this area.
The Marine Technology sales in general comprise of: ● Outright sales versus rentals. ● Hardware related sales versus Software related sales (Software is generally a higher margin). ● Custom Engineering around its technology (“services”) versus Field Services (where we as our customers with training and mobilization support; and services relating to repairing and servicing customers’ products. ● Levels of commission on sales.
The sales generated by the Marine Technology comprise of: ● Outright sales versus rentals. ● Hardware related sales versus Software related sales (Software is generally a higher margin). ● Custom engineering around its technology (“services”) versus field services (where our technical support engineers are deployed to the field to provide support to our customers in their use of our technology). ● Levels of commission on sales.
Net Income for the year ended October 31, 2023, compared to the year ended October 31, 2022 Year Ended October 31, 2023 Year Ended October 31, 2022 Percentage Change $ 3,124,149 $ 4,301,221 Decrease of 27.4% In the 2023 FY we had Net Income of $3,124,149 compared to $4,301,221 in the 2022 FY, representing a decrease of 27.4%.
Net Income for the year ended October 31, 2024, compared to the year ended October 31, 2023 Year Ended October 31, 2024 Year Ended October 31, 2023 Percentage Change $ 3,645,996 $ 3,124,149 Increase of 16.7% In the 2024 FY we had Net Income of $3,645,996 compared to $3,124,149 in the 2023 FY, representing an increase of 16.7%.
The Company’s UK subsidiaries have carryforward losses and research and development (R&D) tax credits in their tax jurisdiction which has been applied to offset a portion of the 2023 FY tax liability. For 2023 FY, a current provision of $2,930 and deferred provision of $60,970 has been made for tax liability of the UK subsidiaries.
The Company’s UK subsidiaries benefit from carryforward losses (NOLs) and research and development (R&D) tax credits. These have been applied to offset a portion of the 2024 FY UK tax liability resulting in a current provision for tax liability of the UK subsidiaries of $267,759 for Current Tax Expense and a Deferred expense of $2,511.
Further discussions on SG&A are set out immediately below. 27 Key Areas of SG&A Expenditure across the Group for the year ended October 31, 2023, compared to the year ended October 31, 2022 Expenditure October 31, 2023 October 31, 2022 Percentage Change Wages and Salaries $ 3,499,542 $ 3,752,524 Decrease of 6.7% Legal and Professional Fees (including accounting, audit, tax and investor relations) $ 1,809,604 $ 1,419,013 Increase of 27.5% Rent for our various locations $ 50,767 $ 64,637 Decrease of 21.5% Marketing $ 216,403 $ 197,258 Increase of 9.7% In the 2023 FY compared to the 2022 FY: Wages and Salaries decreased by 6.7%.
Further discussions on SG&A are set out immediately below. 32 Key Areas of SG&A Expenses across the Group for the year ended October 31, 2024, compared to the year ended October 31, 2023 Expenditure October 31, 2024 October 31, 2023 Percentage Change Wages and Salaries $ 3,627,748 $ 3,499,542 Increase of 3.7% Legal and Professional Fees (including accounting, audit, tax and investor relations) $ 1,658,648 $ 1,809,604 Decrease of 8.3% Rent for our various locations $ 29,330 $ 50,767 Decrease of 42.2% Marketing (excluding associated travel) $ 382,440 $ 216,403 Increase of 76.7% Travel associated with Marketing activities $ 70,120 $ 41,149 Increase of 70.4% In the 2024 FY compared to the 2023 FY: Wages and Salaries increased by 3.7%.
Regarding our Products Segment, all our products are sold on a stand-alone basis and those market prices are evidence of the value of the products.
Our product sales do not include a right of return from the customer. Regarding our Marine Technology Business, all our products are sold on a stand-alone basis and those market prices are evidence of the value of the products.
Due to the protracted nature of the government procurement process and cycle for defense spending under federal and/or state budgets, the sales cycle can be long and unpredictable, thus affecting timing of orders and thus revenues and our overall growth plans. 22 Critical Accounting Policies and Estimates The Management’s discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements.
Due to the protracted nature of the government procurement process and cycle for Defense spending under federal and/or state budgets, the sales cycle can be long, unpredictable and subject to variation by the different Administrations, thus affecting timing of orders, revenues and our overall growth plans. I.
A significant proportion of our consolidated revenues (51.4% in 2023 FY compared to 53.9% in the 2022 FY) are generated outside of the United States by our foreign subsidiaries in the United Kingdom (“UK”) and Denmark.
A significant proportion of our consolidated revenues are generated outside of the United States by our foreign subsidiaries in the United Kingdom (“UK”) and Denmark and in the 2024 FY our foreign subsidiaries generated $12,936,755, representing 63.7% of our consolidated revenue.
Significant Increase in the Price of Raw Materials While there have been improvements in lead time for supply of raw materials and components in the Supply Chain during the reporting period, there is significant inflation which impacts the costs of raw materials which we are unlikely to be able to pass on to our customers due to the extent of these increases.
Significant Increase in the Price of Raw Materials While there have been improvements in lead time for supply of raw materials and components in the Supply Chain during the reporting period, we have experienced a significant increase in the costs of raw materials caused by inflation.
Actual results could differ from those estimates, and material effects on our operating results and financial position may result. We believe the following accounting estimates are most critical to understanding our consolidated financial statements. See “Note 2 - Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements for a full description of our accounting policies.
We believe the following accounting estimates are most critical to understanding our consolidated financial statements. See “Note 2 - Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements for a full description of our accounting policies. Revenue Recognition Revenues are earned under formal contracts with our customers.
Other Income : Year Ended October 31, 2023 Year Ended October 31, 2022 Percentage Change $ 681,676 $ 128,271 Increase of 431.4 % In the 2023 FY, we had “Other Income” of $681,676 compared to $128,271, representing an increase of 431.4% from the 2022 FY.
This is largely due to the increase in our consolidated revenue and gross profit. Other Income : Year Ended October 31, 2024 Year Ended October 31, 2023 Percentage Change $ 1,027,157 $ 681,676 Increase of 50.7 % In the 2024 FY, we had “Other Income” of $1,027,157 compared to $681,676, representing an increase of 50.7% from the 2023 FY.
In the 2023 FY $642,530 of this amount represents interest income earned on our certified deposit accounts. In February 2023, the Company established certified deposit accounts with its existing bankers. These accounts are for fixed 3-month rolling periods and constitute “cash equivalents” in our current audited Consolidated Financial Statements for period ended October 31, 2023.
These accounts are for fixed 3-month rolling periods and constitute “cash equivalents” in our current audited Consolidated Financial Statements for the period ended October 31, 2024.
The UK Government is generally in lock step with the US Government’s position and has refused to grant export licenses for several of the Company’s applications for end users in China for the first time in 25 years of our dealing with the UK Export Control Organization.
Many Chinese entities have been included on the US Bureau of Industry and Security blacklist where there is a presumption of denial of grant of export licenses. The UK Government is generally in lock step with the US Government’s position and has refused to grant export licenses for several of the Company’s applications for end users in China.
The curtailment of access to this market due to refusal to issue export licenses is likely to significantly impact our revenues from Asia.
The curtailment of access to this market due to refusal to issue export licenses is likely to significantly impact our revenues from Asia. The removal of China as a trading partner (the second largest economy in the world) is likely to have a significant negative impact on our revenues and growth strategy.
The removal of China as a trading partner is likely to have a significant negative impact on our revenues and growth strategy. China has one of the largest planned and funded investment programs for offshore renewables, the market for which most of our technology is used for in China.
China has one of the largest planned and funded investment programs for offshore renewables, the market for which most of our technology is used for in China. After significant business development in China, we had started to see persistent and credible growth for our products in this market.
Our contracts do not include the possibility for additional contingent consideration so that our determination of the contract price does not involve having to consider potential variable additional consideration. Our product sales do not include a right of return by the customer.
In respect of our Marine Technology Business these are derived from both sales and rental of underwater technologies and in respect of our Engineering Business from the supply of engineering services. Our contracts do not include the possibility for additional contingent consideration so that our determination of the contract price does not involve having to consider potential variable additional consideration.
We anticipate that the interest earned on these certified deposit accounts will be material in the future if interest rates remain the same or continue to rise. See “Note 6 - Composition of Certain Financial Statement Captions” (Other Income) to the audited Consolidated Financial Statements for period ended October 31, 2023, where this is discussed further.
See “Note 6 - Composition of Certain Financial Statement Captions” (Other Income) to the audited Consolidated Financial Statements for period ended October 31, 2024, where this is discussed further.
Changes in this category by Segment are set out immediately below: Description Amount % increase / (decrease) Marine Technology Business (Products Segment) 2023 FY $ 2,043,890 Decrease 7.4% Marine Technology Business (Products Segment) 2022 FY $ 2,207,500 Engineering Business (Services Segment) 2023 FY $ 52,577 Increase 72.8% Engineering Business (Services Segment) 2022 FY $ 30,420 Selling, General and Administrative Expenses (SG&A) : Year Ended October 31, 2023 Year Ended October 31, 2022 Percentage Change $ 8,195,036 $ 7,948,704 Increase of 3.1% The increase in SG&A is largely due to the increase in the category of Legal and Professional fees resulting from an increase in costs incurred for tax specialists’ fees, increase in board of directors’ fees, increase in our marketing expenses and exchange rate variances.
Changes in this category by Segment are set out immediately below: Description Amount % change Products Business (Products Segment) 2024 FY $ 2,019,112 Decrease 1.2% Products Business (Products Segment) 2023 FY $ 2,043,890 Engineering Business (Services Segment) 2024 FY $ 223,317 Increase 324.7% Engineering Business (Services Segment) 2023 FY $ 52,577 Selling, General and Administrative Expenses (SG&A) : Year Ended October 31, 2024 Year Ended October 31, 2023 Percentage Change $ 8,346,545 $ 8,195,036 Increase of 1.8% In the 2024 FY SG&A expenditures increased by 1.8% when compared to the 2023 FY.
Operating Activities Net cash generated from operating activities for the year ended October 31, 2023, was $2,389,876. We recorded net income for the period of $3,124,149. Other items in uses and sources of funds from operations included non-cash charges related to depreciation of fixed assets, amortization of intangible assets, deferred tax asset and stock-based compensation, which collectively totaled $1,361,452.
Other items in uses and sources of funds from operations included non-cash charges related to depreciation of fixed assets, amortization of intangible assets, deferred tax asset, gain on sale of asset, allowance for credit loss and stock-based compensation, which collectively totaled $1,245,331.
Gross Margin: Year Ended October 31, 2023 Year Ended October 31, 2022 Percentage Change 67.3% (Gross profit of $13,031,055) 68.3% (Gross profit of $15,190,688) Decrease of 1.0% Our consolidated gross profit margins reported in our financial results may vary according to several factors.
Gross Margin: Year Ended October 31, 2024 Year Ended October 31, 2023 Percentage Change 69.8% (Gross profit of $14,173,105) 67.3% (Gross profit of $13,031,055) Increase of 2.5% Our consolidated gross profit margins reported in our financial results may vary according to several factors, which include: ● The percentage of our consolidated sales that is attributable to the Marine Technology Business versus the Services Business.
The Marine Technology Business incurred commission costs of $794,427 compared to $596,426 in the 2022 FY, representing an increase of 33.2%.
The Marine Technology Business incurred commission costs in the 2024 FY of $719,491 compared to $794,427 in the 2023 FY, representing a decrease of 9.4%.
Our Danish subsidiary has no carryforwards or other tax relief in its tax jurisdiction and therefore we have recorded current tax provision of $207,371 for 2023 FY.
Our Danish subsidiary does not benefit from any carryforwards or other tax relief in its tax jurisdiction and therefore for the 2024 FY we have recorded a Current Tax Expense of $218,670 and a Deferred Tax Expense of $11,003.

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