|
|
x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIESEXCHANGE
ACT OF 1934
|
Delaware
|
34-200-8348
|
|
(State
or other jurisdiction of Incorporation or organization)
|
(I.R.S.
Employer Identification Number)
|
|
|
|
|
164
West, 25th
Street,
6th
Floor,
New York
|
10001
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
|
|
|
|
Registrant's
telephone number, including area code:
|
(212)
924-3442
|
Large
accelerated filer o
|
Accelerated
filer o
|
Non-accelerated
filer x
|
|
Page
|
|
||
PART
I - Financial Information
|
|
|
1
|
|
|
|
|
|
|
Item
1: Financial Statements
|
|
|
1
|
|
|
|
|
|
|
Three
Months Ended January 31, 2008 and 2007
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheet as of January 31, 2008 (Unaudited) and
October
31, 2007 (Audited)
|
|
|
1
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Operations and Comprehensive Loss For
The Three
Months Ended January 31, 2008 and 2007 (Unaudited)
|
|
|
2
|
|
|
|
|
|
|
Condensed
Consolidated Statement of Stockholders’ Equity For The Three Months
Ended January 31, 2008 (Unaudited)
|
|
|
3
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Cash Flows For the Three Months Ended
January
31, 2008 and 2007 (Unaudited)
|
|
|
4
|
|
|
|
|
|
|
Notes
to Condensed Consolidated Financial Statements (Unaudited)
|
|
|
5
|
|
|
|
|
|
|
Item
2: Management's Discussion and Analysis or Plan of Operation
|
|
|
22
|
|
|
|
|
|
|
Item
3:
Controls
and Procedures
|
|
|
30
|
|
|
|
|
|
|
PART
II - Other Information
|
|
|
31
|
|
|
|
|
|
|
Item
1: Legal Proceedings
|
|
|
31
|
|
|
|
|
|
|
Item
2: Unregistered Sales of Equity Securities and Use of Proceeds
|
|
|
31
|
|
|
|
|
|
|
Item
3: Defaults Upon Senior Securities
|
|
|
31
|
|
|
|
|
|
|
Item
4: Submission of Matters to a Vote of Security Holders
|
|
|
31
|
|
|
|
|
|
|
Item
5: Other Information
|
|
|
31
|
|
|
|
|
|
|
Item
6: Exhibits
|
|
|
31
|
|
|
|
|
|
|
Signatures
|
|
|
31
|
|
January
31, 2008
(Unaudited)
|
October
31, 2007
(Audited)
|
||||||
ASSETS
|
|
||||||
Current
assets:
|
|||||||
Cash
and cash equivalents
|
$
|
531,468
|
$
|
916,257
|
|||
Short-term
investments, Note 3
|
748,000
|
935,000
|
|||||
Accounts
receivable, net of allowance for doubtful accounts
|
1,132,000
|
2,720,151
|
|||||
Inventory
|
2,738,373
|
2,926,517
|
|||||
Due
from related parties, Note 12
|
105,685
|
105,685
|
|||||
Unbilled
receivables, Note 2
|
781,373
|
380,017
|
|||||
Other
current assets, Note 4
|
615,147
|
691,560
|
|||||
Prepaid
expenses
|
415,455
|
476,283
|
|||||
|
|||||||
Total
current assets
|
7,067,501
|
9,151,470
|
|||||
Property
and equipment, net, Note 5
|
403,557
|
422,738
|
|||||
Rental
equipment, net, Note 5
|
-
|
-
|
|||||
Goodwill
and other intangible assets, net, Note 6
|
3,958,244
|
4,007,253
|
|||||
Total
assets
|
$
|
11,429,302
|
$
|
13,581,461
|
|||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
Current
liabilities:
|
|||||||
Accounts
payable, trade
|
$
|
1,911,275
|
$
|
1,618,250
|
|||
Accrued
expenses and other current liabilities
|
2,173,398
|
1,937,569
|
|||||
Deferred
revenues, Note 2
|
542,628
|
593,325
|
|||||
Deferred
payment related to acquisitions, Note 13
|
763,936
|
763,936
|
|||||
Accrued
dividends on Series A&B Preferred Stock
|
31,872
|
86,766
|
|||||
Due
to related parties, Note 12
|
115,779
|
184,425
|
|||||
Loans
and notes payable, short term, Note 11
|
88,698
|
56,382
|
|||||
|
|||||||
Total
current liabilities
|
5,628,086
|
5,240,653
|
|||||
|
|||||||
Loans
and notes payable, long term, Note 11
|
215,874
|
265,139
|
|||||
|
|||||||
Total
liabilities
|
5,843,960
|
5,505,792
|
|||||
|
|||||||
Stockholders'
equity:
|
|||||||
Preferred
stock, $.001 par value; 5,000,000 shares authorized, 6,287 and
6,407 Series A issued and outstanding, as of January 31, 2008
and
October 31, 2007 respectively
|
6
|
6
|
|||||
Common
stock, $.001 par value; 100,000,000 shares authorized, 48,279,056
and
48,245,768 shares issued and outstanding as of January 31, 2008
and
October 31, 2007 respectively
|
48,279
|
48,246
|
|||||
Common
Stock subscribed
|
116,640
|
80,000
|
|||||
Additional
paid-in capital
|
49,979,776
|
49,785,244
|
|||||
Accumulated
other comprehensive loss
|
(542,758
|
)
|
(238,097
|
)
|
|||
Accumulated
deficit
|
(44,016,601
|
) |
(41,599,730
|
)
|
|||
Total
stockholders' equity
|
5,585,342
|
8,075,669
|
|||||
Total
liabilities and stockholders' equity
|
$
|
11,429,302
|
$
|
13,581,461
|
For
the three months ended January 31, 2008
|
For
the three months ended January 31, 2007
|
||||||
Net
revenue
|
$
|
3,127,231
|
$
|
2,701,275
|
|||
|
|||||||
Cost
of revenue
|
1,642,776
|
941,029
|
|||||
|
|||||||
Gross
profit
|
1,484,455
|
1,760,246
|
|||||
|
|||||||
Research
and development
|
689,193
|
518,393
|
|||||
Selling,
general and administrative expenses
|
3,056,927
|
3,224,659
|
|||||
Other
operating expenses
|
-
|
435,000
|
|||||
|
|||||||
Operating
loss
|
(2,261,665
|
)
|
(2,417,806
|
)
|
|||
|
|||||||
Other
income (expense)
|
|||||||
|
|||||||
Other
income (expense)
|
4,857
|
2,098
|
|||||
Interest
expense
|
(113,971
|
)
|
(115,211
|
)
|
|||
|
|||||||
Total
other expense
|
(109,114
|
)
|
(113,113
|
)
|
|||
|
|||||||
Loss
before income taxes
|
(2,370,779
|
)
|
(2,530,919
|
)
|
|||
|
|||||||
Provision
for income taxes
|
-
|
-
|
|||||
|
|||||||
Net
loss
|
(2,370,779
|
)
|
(2,530,919
|
)
|
|||
|
|||||||
Preferred
Stock Dividends:
|
|||||||
Series
A
|
(46,093
|
)
|
(119,815
|
)
|
|||
Beneficial
conversion feature
|
-
|
(800,000
|
)
|
||||
|
|||||||
Net
loss applicable to common shares
|
$
|
(2,416,872
|
)
|
$
|
(3,450,734
|
)
|
|
|
|||||||
Loss
per share, basic and diluted
|
(0.05
|
)
|
(0.14
|
)
|
|||
|
|||||||
Weighted
average shares outstanding
|
48,250,366
|
24,528,132
|
|||||
|
|||||||
Comprehensive
loss:
|
|||||||
|
|||||||
Net
loss
|
$
|
(2,370,779
|
)
|
$
|
(2,530,919
|
)
|
|
|
|||||||
Foreign
currency translation adjustment
|
(117,661
|
)
|
(35,488
|
)
|
|||
Unrealized
loss on investment
|
(187,000
|
)
|
-
|
||||
Comprehensive
loss
|
$
|
(2,675,440
|
)
|
$
|
(2,566,407
|
)
|
Three
Months Ended
|
Preferred
Stock
Series
A
|
Preferred
Stock
Series
B
|
Common
Stock
|
Stock
|
Additional
Paid-in
|
Accumulated
Other
Comprehensive
|
Accumulated
|
|||||||||||||||||||||||||||
Jan
31, 2008
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Subscribed
|
Capital
|
Loss
|
Deficit
|
Total
|
|||||||||||||||||||||||
Balance,
October 31, 2007
|
6,407
|
$
|
6
|
-
|
$
|
-
|
48,245,768
|
$
|
48,246
|
80,000
|
$
|
49,785,244
|
$
|
(238,097
|
)
|
$
|
(41,599,730
|
)
|
$
|
8,075,669
|
||||||||||||||
|
||||||||||||||||||||||||||||||||||
Sale
of preferred stock
|
200
|
0
|
|
(20,000
|
)
|
20,000
|
-
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||
Conversion
of preferred stock to common
|
(320
|
)
|
0
|
|
|
56,640
|
(56,640
|
)
|
-
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||
Stock
issued for compensation
|
5,000
|
5
|
3,245
|
3,250
|
||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||
Fair
value of options and warrants issued as compensation
|
192,939
|
192,939
|
||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||
Preferred
stock dividends
|
||||||||||||||||||||||||||||||||||
Series
A cash
|
(46,093
|
)
|
(46,093
|
)
|
||||||||||||||||||||||||||||||
Series
A stock
|
28,288
|
28
|
34,988
|
35,016
|
||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||
Accumulated
other comprehensive loss
|
||||||||||||||||||||||||||||||||||
Foreign
currency translation adjustment
|
(117,661
|
)
|
(117,661
|
)
|
||||||||||||||||||||||||||||||
Unrealized
loss from marketable securities
|
(187,000
|
)
|
(187,000
|
)
|
||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||
Net
loss
|
|
|
|
|
|
|
|
|
|
(2,370,779
|
)
|
(2,370,779
|
)
|
|||||||||||||||||||||
Balance
January 31, 2008
|
6,287
|
$
|
6
|
-
|
$
|
-
|
48,279,056
|
$
|
48,279
|
$
|
116,640
|
$
|
49,979,776
|
$
|
(542,758
|
)
|
$
|
(44,016,601
|
)
|
$
|
5,585,342
|
2008
|
2007
|
||||||
|
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|||||
Net
loss
|
$
|
(2,370,779
|
)
|
$
|
(2,530,919
|
)
|
|
Adjustments
to reconcile net loss to net cash
|
|||||||
used
by operating activities:
|
|||||||
Depreciation
and amortization
|
97,196
|
68,312
|
|||||
Stock
based compensation
|
196,189
|
1,629,214
|
|||||
Dividends
|
46,093
|
-
|
|||||
Changes
in operating assets and liabilities:
|
|||||||
(Increase)
decrease in:
|
|||||||
Accounts
receivable
|
1,588,151
|
54,296
|
|||||
Inventory
|
188,144
|
(393,618
|
)
|
||||
Prepaid
expenses
|
60,827
|
(37,220
|
)
|
||||
Other
receivables
|
(324,943
|
)
|
(181,498
|
)
|
|||
Increase
(decrease) in:
|
|||||||
Accounts
payable and accrued expenses
|
478,657
|
(347,147
|
)
|
||||
Due
to related parties
|
(68,646
|
)
|
25,813
|
||||
Net
cash used in operating activities
|
(109,110
|
)
|
(1,712,767
|
)
|
|||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||
Purchases
of property and equipment
|
(29,006
|
)
|
(36,840
|
)
|
|||
Net
cash used by investing activities
|
(29,006
|
)
|
(36,840
|
)
|
|||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||
Payments
for loans payable
|
(16,949
|
) |
(317,243
|
)
|
|||
Proceeds
from sale of stock
|
-
|
800,000
|
|||||
Preferred
stock dividend paid
|
(64,491
|
)
|
(63,371
|
)
|
|||
Net
cash (used in) provided by financing activities
|
(81,440
|
)
|
419,386
|
||||
Effect
of exchange rate changes on cash
|
(165,233
|
)
|
(24,948
|
)
|
|||
Net
(decrease) in cash
|
(384,789
|
)
|
(1,355,169
|
)
|
|||
Cash
and cash equivalents, beginning of period
|
916,257
|
1,377,972
|
|||||
Cash
and cash equivalents, end of period
|
$
|
531,468
|
$
|
22,803
|
|||
Cash
paid for:
|
|||||||
Interest
|
$
|
113,971
|
$
|
115,211
|
|||
Income
taxes
|
-
|
-
|
2008
|
|
2007
|
|||||
Raw
materials
|
$
|
1,589,320
|
$
|
1,789,051
|
|||
Work
in process
|
305,139
|
334,813
|
|||||
Finished
goods
|
843,914
|
802,653
|
|||||
Total
inventory
|
$
|
2,738,373
|
$
|
2,926,517
|
2008
|
|
2007
|
|||||
Deposits
|
$
|
302,369
|
$
|
191,352
|
|||
Value
added tax (VAT)
|
265,644
|
293,934
|
|||||
Other
receivables
|
47,134
|
206,274
|
|||||
Total
|
$
|
615,147
|
$
|
691,560
|
2008
|
|
2007
|
|||||
Machinery
and equipment
|
$
|
1,012,121
|
$
|
983,115
|
|||
Accumulated
depreciation
|
(608,564
|
)
|
(560,377
|
)
|
|||
Net
property and equipment assets
|
$
|
403,557
|
$
|
422,738
|
2008
|
|
2007
|
|||||
Rental
equipment
|
$
|
240,876
|
$
|
240,876
|
|||
Accumulated
depreciation
|
(240,876
|
)
|
(240,876
|
)
|
|||
Net
rental equipment assets
|
$
|
-
|
$
|
-
|
2008
|
2007
|
||||||
Customer
relationships (weighted average life of 10 years)
|
$
|
694,503
|
$
|
694,503
|
|||
Non-compete
agreements (weighted average life of 3 years)
|
198,911
|
198,911
|
|||||
Patents
|
48,530
|
48,530
|
|||||
Licenses
|
100,000
|
100,000
|
|||||
Total
amortized identifiable intangible assets - gross carrying
value
|
1,041,944
|
1,041,944
|
|||||
Less
accumulated amortization
|
(183,275
|
)
|
(134,266
|
)
|
|||
Net
|
858,669
|
907,678
|
|||||
Residual
value
|
$
|
858,669
|
$
|
907,678
|
2008
|
$
|
146,427
|
||
2009
|
165,280
|
|||
2010
|
84,711
|
|||
2011
|
72,656
|
|||
2012
and thereafter
|
389,055
|
|||
Total
|
$
|
858,669
|
2008
|
2007
|
||||||
Beginning
goodwill balance at November 1, 2007
|
$
|
3,099,575
|
$
|
1,060,906
|
|||
Goodwill
recorded upon acquisition
|
-
|
-
|
|||||
Period
End Balance
|
$
|
3,099,575
|
$
|
1,060,906
|
Three
months ended
January
31, 2008
|
Year
ended
October
31, 2007
|
||||||||||||
Number
|
|
Weighted
Average Exercise Price
|
|
Number
|
|
Weighted
Average Exercise Price
|
|||||||
|
|
|
|
||||||||||
Outstanding
at beginning of the period
|
36,519,318
|
$
|
1.39
|
13,410,000
|
$
|
1.29
|
|||||||
Granted
during the period
|
245,000
|
1.32
|
23,473,418
|
1.44
|
|||||||||
Exercised
during the period
|
-
|
-
|
(34,100
|
)
|
1.00
|
||||||||
Terminated
during the period
|
-
|
-
|
(330,000
|
)
|
1.22
|
||||||||
Outstanding
at the end of the period
|
36,764,318
|
$
|
1.39
|
36,519,318
|
$
|
1.39
|
|||||||
Exercisable
at the end of the period
|
35,754,517
|
$
|
1.39
|
35,467,518
|
$
|
1.39
|
Range
of
Exercise
Prices
|
Number
Outstanding
|
|
Weighted
Average Contractual Life (Yrs)
|
|
Total
Vested
|
|||||
0.50
|
750,000
|
3.25
|
750,000
|
|||||||
0.58
|
400,000
|
3.16
|
400,000
|
|||||||
1.00
|
5,845,900
|
3.32
|
5,634,700
|
|||||||
1.30
|
14,781,709
|
3.99
|
14,375,209
|
|||||||
1.50
|
525,000
|
3.85
|
410,499
|
|||||||
1.70
|
14,401,709
|
3.98
|
14,164,109
|
|||||||
1.80
|
60,000
|
4.65
|
20,000
|
|||||||
Totals
|
36,764,318
|
3.85
|
35,754,517
|
Non-Current
|
2008
|
2007
|
|||||
Net
Operating Loss Carry Forward
|
$
|
11,005,000
|
$
|
10,455,000
|
|||
Valuation
Allowance
|
(11,005,000
|
)
|
(10,455,000
|
)
|
|||
Net
Deferred Tax Asset
|
$
|
-
|
$
|
-
|
2008
|
$
|
450,506
|
||
2009
|
366,679
|
|||
2010
|
350,493
|
|||
2011
|
321,283
|
|||
2012
and thereafter
|
33,295
|
|||
Total
|
$
|
1,522,256
|
2008
|
|
2007
|
|||||
The
Company, through its UK subsidiary Coda Octopus Products Ltd has
a 7 year
unsecured loan note; interest rate of 12% annually; repayable at
borrower’s instigation or convertible into common stock when the share
price reaches $3.
|
$
|
200,000
|
$
|
200,000
|
|||
The
Company, through its US subsidiary Innalogic, Inc., has a capital
lease
for equipment for monthly payments of $2,369.74 for 24 months. The
Company
at year end has sold the equipment and thus violated the terms of
the
lease that prohibit sale of equipment under the capital lease. The
Company
has deferred revenue of $127,340 in relation to this capital lease.
See
Note 2.
|
35,314
|
41,091
|
|||||
The
Company has an unsecured revolving line of credit with a US bank
through
its US subsidiary Colmek Systems Engineering, for $50,000 with an
interest
rate of 12.5% annually; repayable at borrower’s instigation.
|
14,181
|
17,181
|
|||||
The
Company through its US subsidiary Colmek Systems Engineering, has
an
outstanding loan note payable for the financing of a truck over 60
months;
monthly payments of $897.18; annual interest rate of 10.99%.
|
26,973
|
29,145
|
|||||
The
Company through its US subsidiary Colmek Systems Engineering, has
an
unsecured loan note payable to a director and former officer of the
Company.
|
28,104
|
34,104
|
|||||
Total
|
$
|
304,572
|
$
|
321,521
|
|||
Less:
current portion
|
88,698
|
56,382
|
|||||
Total
long-term portion
|
$
|
215,874
|
$
|
265,139
|
Current
assets acquired
|
$
|
231,043
|
||
Equipment,
net
|
80,007
|
|||
Current
liabilities assumed
|
(727,913
|
)
|
||
Customer
relationships acquired
|
694,503
|
|||
Non-compete
agreements acquired
|
198,911
|
|||
Goodwill
acquired
|
2,038,669
|
|||
Total
purchase price
|
$
|
2,515,220
|
2007
|
||||
Revenue
|
$
|
3,373,963
|
||
Net
loss
|
(2,528,407
|
)
|
||
Loss
per common share
|
(0.16
|
)
|
Contracting
|
Products
|
Corporate
|
Totals
|
||||||||||
Revenues
|
$
|
1,293,458
|
$
|
1,770,954
|
$
|
62,819
|
$
|
3,127,231
|
|||||
Operating
profit/(loss)
|
(426,846
|
)
|
404,750
|
(2,239,569
|
)
|
(2,261,665
|
)
|
||||||
Identifiable
assets
|
5,504,706
|
2,627,258
|
3,399,339
|
11,531,303
|
|||||||||
Capital
expenditure
|
2,861
|
23,054
|
3,090
|
29,006
|
|||||||||
Selling,
general & administrative
|
893,291
|
626,916
|
1,536,720
|
3,056,927
|
|||||||||
Depreciation
& amortization
|
64,921
|
18,764
|
13,511
|
97,196
|
|||||||||
Interest
expense
|
29,173
|
78,453
|
6,345
|
113,971
|
2008
|
2007
|
||||||
Revenues:
|
|
|
|||||
United
States
|
$
|
1,632,476
|
$
|
7,129,507
|
|||
United
Kingdom
|
1,431,936
|
6,723,806
|
|||||
Corporate
and other
|
62,819
|
-
|
|||||
Total
Revenues
|
$
|
3,127,231
|
$
|
13,853,313
|
|||
Assets:
|
|||||||
United
States
|
$
|
4,463,518
|
$
|
5,529,261
|
|||
United
Kingdom
|
3,668,445
|
6,597,202
|
|||||
Corporate
and other
|
3,399,339
|
1,454,999
|
|||||
Total
Assets
|
$
|
11,531,303
|
$
|
13,581,462
|
|
·
|
marine
geophysical survey (commercial), which focuses around oil and gas,
construction and oceanographic research and exploration, where we
market
to survey companies, research institutions, salvage companies. This
was our original focus, from original founding in 1994,with current
products spanning geophysical data collection and analysis, through
to
printers to output geophysical data collected by sonar. We believe
that
our marine geophysical survey markets are experiencing rapid growth
due
to: 1) successful new product introductions in recent periods; 2)
market-proximity benefits derived from 2004 relocation to the United
States; 3) initial market penetration into new sub-sectors of the
marine
geophysical survey markets; 4) the high price of oil and gas in the
past
few years, resulting in unprecedented exploration and production
activity.
|
|
·
|
underwater
defense/security, where we market to ports and harbors, state and
federal
government agencies and defense contractors. We started to focus
on this
market following the acquisition of OmniTech AS, a Norwegian Company,
in
December 2002, a company which had developed a prototype system,
the
Echoscope
™,
a unique, patented instrument which permits accurate three-dimensional
visualization, measurement, data recording and mapping of underwater
objects. We have recently completed developing and commenced marketing
this first real time, high resolution, three-dimensional underwater
sonar
imaging device which we believe has particularly important applications
in
the fields of port security, defense and undersea oil and gas development.
|
|
·
|
First
mover advantage in 3-D sonar markets based on our patented technology,
our
research and development efforts and extensive and successful testing
in
this area that date back almost two decades as well as broad customer
acceptance.
|
|
|
|
|
·
|
Early
recognition of need for 3-D real-time sonar in defense/security
applications.
|
|
|
|
|
·
|
Expansion
into new geographies like North America and the Western hemisphere.
|
|
|
|
|
·
|
Expansion
into new commercial markets like commercial marine survey with innovative
products.
|
|
|
|
|
·
|
Recent
sole source classification for one of our products and its derivatives
by
certain government procurement agencies.
|
|
·
|
we
are now starting to bid (sometimes in partnership, where areas of
focus
other than underwater sonar and wireless video surveillance capability
are
demanded) for complete port security and other solutions. We have
bid on a
small number of these in the last six months and hope for our first
successes shortly.
|
|
·
|
we
are currently reviewing the possibility of launching next year, in
partnership with others, a services business based on our product
set.
This business will be port based and will, for example, provide ship
hull
inspections by way of rental of equipment and provision of a team
to
operate the equipment for any ship entering that particular port.
|
|
·
|
Continue
to sell our current range of products into a mixture of commercial,
defense and security markets, increasing sales of these products
over the
course of this financial year - we are expecting previous growth
trends
broadly to continue over the course of the
year.
|
|
·
|
Start
to sell complete turnkey systems based around our leading Echoscope™ 3-D
technology, to open markets in law enforcement and inspection - a
great
deal of our R&D expenditure has been directed towards refining our
product and completing sales this year that are currently in our
pipeline,
with delivery expected to start from the second
quarter.
|
|
·
|
Continue
to deliver to the Coast Guard on the contract we were awarded last
July.
Work on stage 2 will begin in the second
quarter.
|
·
|
Deliver
on our first port security solution contract through the provision
of our
unique 3-D technology and other products and services, enabling us
to
provide complete solutions.
|
|
·
|
Leverage
our subsidiaries to take advantage of our lead in underwater sonar
technology by cross marketing all group products and services from
each
company.
|
|
·
|
Continue
to review and refocus our cost base where necessary to achieve a
cost
level commensurate with our current level of activity.
|
·
|
Insufficient
disclosure controls in that we have experienced insufficient communication
between the various subsidiaries and departments and a lack of timely
financial reporting.
|
·
|
Insufficient
accounting procedures relating to areas including: revenue booking,
inventory control, expense sign off procedures and shipping documentation.
|
31
|
Certifications
of the Chief Executive Officer and Chief Financial Officer pursuant
to
Rule 13a-14(a)
|
Certifications
of Chief Executive Officer and Chief Financial Officer pursuant to
18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|
Coda
Octopus Group, Inc.
(Registrant)
|
||
|
|
|
Date:
March 19, 2008
|
/s/ Jason
Reid
|
|
Jason
Reid
|
||
President
and Chief Executive Officer
|