Good day, everyone, and welcome to today's Nauticus Robotics 2024 Q1 Earnings Call. [Operator Instructions] Please note, this call is being recorded, and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Kristin Moorman, Special Project Lead.

Thank you, and good morning, everyone. Joining me today and participating in the call are John Gibson, CEO and President; Vicki Hay, Interim CFO; Nick Bigney, General Counsel; and other members of our leadership team. On today's call, we will first provide prepared remarks concerning our operations and financial results. Following that, we will answer questions. We have now released our results for the first quarter of 2024, which are available on our website. In addition, today's call is being webcast, and a replay will be available on our website shortly following the conclusion of the call. Please note that comments we make on today's call regarding projections or our expectations for future events are forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to review our earnings release and the risk factors discussed in our filings with the SEC. Also, please refer to the reconciliations provided in our earnings press release as we may discuss non-GAAP metrics on this call. I will now turn it over to John.

Well, good morning. Thank you, Kristin, and thank you all for joining us for our conference call. I'm extremely excited about the company, but is -- it's my style. I tend to go straight into a couple of challenges that the company faces, and then we're going to switch over to the excitement of the pipeline of opportunities that are building around Aquanaut toolkit. Now our listing makes us both unique and valuable. [indiscernible] has to be a limited partner and a venture capital fund, which requires a $0.25 million minimum to participate. We offer an opportunity to invest directly in an emerging high-growth technology business serving the ocean market with anticipated CAGRs in the ocean market ranging from 8% to 15% for offshore drilling and win, respectively, through the year 2030 with a talented team and an AUV ready to start generating revenue from the industrial, environmental, commercial and defense sectors. Nauticus is a high-risk investment, but with the potential to generate returns greater than the market. Now while we are public, we more closely resemble an emerging growth company seeking a B round of funding. We're a technology play in the emerging blue economy with a very unique product that satisfies the needs of our customers to reduce costs, reduce emissions, reduce labor requirements, improve safety and, most importantly, gather vast quantities of subsea data to enable the sustainable development of the ocean. We have fantastic products coming into a strong market this year. We are shifting from being dependent upon defense to being entrenched in the industrial, commercial and environmental sectors as well. We're building a company to attract, buy and hold investors. Now the first issue. We need for you to vote yes on the reverse split, Item #3 of the special meeting being hosted on…

Thank you very much, John. I appreciate that. I'm pleased to report positive developments regarding Aquanaut vehicle and ToolKITT. We have secured strong support from our existing customers and are actively collaborating to facilitate Aquanaut's commercial project eligibility in Q3 of 2024. The Aquanaut vehicle, in conjunction with our ToolKITT software suite, addresses a significant unmet need within the market. The integrated solution offers a compelling value proposition by simultaneously reducing operational costs and minimizing environmental impact. I have recently met with several prospective clients, and we are actively cultivating a promising sales pipeline. This pipeline includes 6 potential long-term blue-chip customers across diverse industry segments, encompassing environmental services, oil and gas operations and technology companies. Finally, certification of Aquanaut in 2024 presents a strategic opportunity to secure budget for the remainder of the year and lay groundwork for continued accelerated growth in 2025. We will continue to collaborate with existing customers to expedite the Aquanaut certification process. We're also actively quantifying the cost savings and environmental benefits of the Aquanaut vehicle and ToolKITT software to further solidify its value proposition. Back to you, John.

Well, I appreciate that Jorge. Now this update reflects a very positive trajectory for our company. And it underlies a robust market demand for our products and positions our company for significant commercial expansion with our products, both software and Aquanaut. You may have noticed that Jorge did not, however, mentioned our work in the defense sector. Nauticus has a long history of defense revenues. As I mentioned on our previous earnings call, we intend to seek work in the defense sector to the extent that it is profitable and a fit for us. However, because both of our size and the nature of defense spending, our revenue from defense can be uneven and sporadic. And so we've chosen to transition to a daily revenue commercial model, and we think that's a really important change for our company. Now with that, I'm going to turn it over to Vicki to walk you through our financial results. Vicki?

Thanks, John, and good morning. I am pleased to be presenting our Q1 financial results. Revenue for the first quarter was $500,000, which is down $2.4 million from the same period last year and down $600,000 from the prior quarter. Revenue recognized in the first quarter is a combination of continuing government revenue, along with the start of our commercial revenue relating to the Aquanaut vehicle. Operating expenses for the first quarter were $6.0 million, which is a $2.6 million decrease from Q1 '23 and a sequential decrease of $29.3 million. The fourth quarter results included a $25.3 million impairment and a $2.5 million expense loss on contract. However, when considering both of these factors, we are seeing a reduction on term costs and expenses by $1.4 million or 18% compared to Q4 '23. G&A costs for the first quarter were $3.4 million, which includes a noncash stock compensation expense of $0.5 million and nonrecurring legal fees of $0.4 million. This is a bit $1.8 million decrease compared to the same period in '23, and a reduction of $300,000 sequentially. We continue our focus to further reduce G&A throughout the remainder of '24 to meet our target of $8.3 million for '24 cash G&A previously disclosed. Net income for the quarter was $414,000. This is a $14.6 million increase from Q1 '23 and $40.0 million increase from the fourth quarter of 2023. The net income number includes an $8.3 million gain in fair value of warrant liabilities for the first quarter. Adjusted net loss for the first quarter was $7.4 million compared to a loss of $8.8 million for the prior quarter and a loss of $10.7 million in the same period prior year. As you can see from these results, we are seeing the benefits of cost-cutting initiatives that we embarked on in Q4 2023. Cash at the end of Q1 '24 was $6.2 million compared to $0.8 million at the end of 2023. The higher balance in cash was the result of $11.7 million net cash received from $13.3 million of funding received in January. Per our debt covenants, we are required to have $5.7 million cash at the end of the first quarter, which we exceeded by $0.5 million. During April, we also received an extra $1 million of funding from current investors. As a company, we are working hard to preserve cash while further reducing costs and gaining efficiencies. The results we are presenting this quarter show a marked improvement from previous quarters, and we expect to continue to see this improve in future quarters as additional savings are realized. I will now pass back over to John.

Thank you, Vicki. We continue to focus on cost here, and we also focus on getting our vehicles in the market and having them generate daily revenue. Now to get them in the market does require the testing and certification. And as I learned when I came here, that's a pretty expensive endeavor. And we studied that and being focused on cost, we came up with a new arrangement I'm excited to announce today. We'll be working with Florida Atlantic University, and that's going to allow us to reduce our testing and certification cost for our new vehicles that will be going into daily revenue in the market by 90-plus percent from what we spent on certifying and testing the first vehicle. It's a tremendous improvement in what it cost to test and certify vehicle. What it's also going to do, because Florida Atlantic University is well recognized in AUVs and robotics, it allows us to work with a university where we can create a pipeline of new hires and students and train the next generation of operators that are needed for AUVs. It's very exciting to take that much cost out of a process that's required and to build a strong relationship with a powerful university in this space. Now with that, operator, that will conclude our remarks for today, and we're prepared to take a few questions.

[Operator Instructions] And it appears that we have no questions at this time. I will now turn the program back over to our presenters for any additional remarks.

Well, it's to be the first time I've concluded a call with no questions, and I'll either assume that we answered all of them or that you're really excited and you're looking for an opportunity to go out and buy a few shares. But we just thank you for participating in the call. We're very excited about the commercial team that we put together here at Nauticus over the last several months to augment what is an incredibly strong research, development and technology group. I think the combination of the 2 and our focus on cash preservation and cost management give us a really exciting future. So thank you so much, and we'll look forward to presenting our numbers here on the next call. Take care.

That concludes today's teleconference. Thank you for your participation. You may now disconnect.