Operator: Hello, everyone. Thank you for joining us, and welcome to the Nauticus Robotics Incorporated second quarter 26 earnings call. After today's prepared remarks, we will host a Q&A session. If you would like to ask a question, please press 1 to raise your hand. To withdraw your question, press 1 again. I will now hand the conference over to Kristin Moorman, corporate development lead. Kristin, please go ahead.

Kristin Moorman: Thank you, and good morning, everyone. Joining me today and participating in the call are John Gibson, CEO and president, Jimena Begaries, interim CFO, and other members of our leadership team. On today's call, we will first provide prepared remarks concerning our financial and operations Following that, we will answer questions. Have now released our results for the quarter ending 06/30/2026 which are available on our website. In addition, today's call is being webcast, and a replay will be available on our site 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, 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.

John Willis Gibson Jr.: Thank you, Kristin, and good morning, everyone. Glad you are joining us today. I am going to save my remarks until the conclusion of the call today. And so at this point, I would like to just turn it over to Jimena to walk through the financials. Jimena?

Jimena Begaries: Thank you, John. Good morning, everyone. During our second quarter, we remained focused on strengthening the company's capital structure and preserving our Nasdaq listing. Completed several important financing initiatives. Including finalizing the registration process for our equity line of credit, filing the series b certificate of designation, and executing additional debt to equity exchanges that reduce outstanding debt by $5.5 million while supporting stockholder equity. I will now discuss our financial results for the second quarter of 2026. Revenue for the second quarter was $900 thousand an increase of $700 thousand sequentially and a decrease of $1.2 million compared to the same quarter last year. Operating expenses for the quarter were $6.9 million, a decrease of $1.6 million from 2025 and an increase of $1 million sequentially. This reflects the continuous focus on cost management partially offset by increased activity levels compared to the first quarter of 2020. G&A costs for the quarter were $3.3 million, representing an improvement of $1.1 million from the same quarter last year. Sequentially, G&A has remained mostly flat. Increasing by less than $100 thousand quarter over quarter, demonstrating continued discipline in managing our corporate overhead. Net loss for the quarter was $11.1 million, compared to $9.3 million in the first quarter of 26 and $7.4 million in the second quarter of 25. The increase was driven mostly by noncash losses recognized on debt extinguishment transactions related to the exchange of outstanding debt for equity securities. Adjusted net loss for the quarter was $7 million, compared to $7.4 million for the second quarter of 25 and $6.4 million in Q1 2026. Cash at the end of Q2 2026 was $2 million compared to $7.6 million at the end of 2025. This decrease is related to cash used in operating activities. As we enter the second half of the year, our priorities remain clear. Continuing to strengthen the balance sheet, maintaining disciplined cost management, and ensuring we have the financial flexibility to support commercial execution and future growth opportunities. With that, I will now hand the call over to Steve Walsh, our sales lead, for an update.

Steve Walsh: Thank you, Jimena, and good morning. Entering the year, many operators based their capital spending plans on oil prices in the mid $50 to $60 per barrel range. Which led to a more cautious approach to offshore activity in the Gulf of Mexico. As a result, several projects we had anticipated moving forward this year have been deferred into 2027 and, in some cases, beyond. In response to these market conditions, we have adjusted our operating model to better align our cost structure with current demand. Our objective has been to maintain flexibility to rapidly deploy our personnel and equipment when projects move forward while avoiding the expense of maintaining a fully mobilized vessel throughout the entire work season. This disciplined approach allows us to remain responsive to customer needs while managing costs and preserving financial flexibility. While these market dynamics have impacted the timing of work in the Gulf, we have made meaningful progress in diversifying our business. We have expanded our presence in the offshore wind market along the East Coast. Successfully completed work with 1 of the world's largest subsea cable-lay companies, have projects scheduled on the West Coast in the coming months and currently have international tendering opportunities. We also achieved an important operational milestone by successfully deploying a Comanche ROV integrated with our Nauticus toolkit software. The combined system performed exceptionally well for our client demonstrating the value of integrating intelligent software with proven subsea hardware. Nautica's Toolkit demonstrated the ability to improve the ROV's operating efficiency while reducing pilot workload allowing missions to be executed more effectively and consistently. This successful deployment further validates our technology strategy and provides another example of how our software enabled solutions can help customers improve productivity reduce operating costs, and enhance the overall efficiency of subsea operations. In addition, we are actively pursuing opportunities outside the United States where we believe our technology and capabilities are well aligned growing demand for efficient, autonomous offshore operations. We are also seeing a growth in the number of opportunities in the defense sector. While these efforts remain in the early stages, we are making strategic investments in marketing, capabilities, alliances and business development to position Nauticus to compete effectively for this work. We believe our autonomous subsea technologies and software driven solutions are well suited to support the evolving defense and national security missions creating another avenue for long term growth and diversification. Although the near term offshore oil and gas market remains challenging, we are encouraged by the strength of our opportunity pipeline the continued expansion of our customer base across multiple offshore markets and the progress we are making in positioning the company for long term growth. We remain focused on executing our strategy expanding our commercial footprint and creating sustainable, value for our shareholders. With that, I will turn it over to Brian Allen our revenue lead for his thoughts on 2026.

Brian Allen: Thanks, Steve. Jimena's taking you through the numbers, and I want to cover why this business has been hard to forecast. And what we are doing about it. Now looking at our revenue the way an investor would, I see a business that is hard to model. And there are 4 reasons for that, and we are changing all of them. First, where we sit in the contracting chain. Our services business is mostly time and materials orientated. And we normally bid as a subcontractor. That means we win work only if the company above us wins theirs first, their timing sets hours, their price effects hours, and when their contract slips, our revenue moves with it. And that is what is been happening. Second, time and materials pricing hands the customer the efficiency our technology creates. So we finish faster, they pay for fewer days, and we earn less overall. And third, our software has only recently become a defined product. While it was maturing, it was not able to be sold easily. Lastly, pipeline coverage. You carry more opportunity than you need, because not everything converts. And in a soft market, that coverage has to be higher. So here's what changes. We are targeting a significant increase in pipeline coverage for 2027. And widening where it comes from, starting up sales activity internationally and across the defense sector. Defense inquiries are already up. And those use cases align well with what our technology does reliably today and have active proposals out now. The services business that we are building internationally will bid as the main contractor. On work where our autonomy gives us a real advantage. And when we hold the contract, we set the price and the scope, and we keep the margin our technology creates. We are putting the quality systems in place to bid at that level. Those contracts will be fixed price. When our autonomy takes days out of the job, that shows up in our margin. And finally, I am extremely pleased to announce the first formal release of our Nauticus toolkit software for ROVs. Now on sale to underwater fleet operators across the energy sector and defense groups. Jason will tell you a little bit more about that shortly, but for the business it starts bringing in recurring, predictable revenue from 2027. And we will communicate our bookings and backlog in future calls. I will now hand you over to Jason.

Jason Close: Thank you, Brian. While we move towards growing product revenue, we continue to make meaningful progress across the technical validation and commercial pathways supporting our product portfolio this quarter. 1 of the clearest examples was the continued use of Nauticus Toolkit in active ROV projects. Software exceeded expectations, in customer operations, particularly improving vehicle stability survey consistency, and the quality of the resulting data. Feedback from both our operators and the customer was highly positive. And reinforced that Nautica's Toolkit can deliver meaningful operational value on existing ROV fleets. These deployments provide important field validation and proof points help us refine and continue to deploy the commercial adoption model. With Aquanaut, we completed the planned freshwater phase of an autonomous mooring line and riser inspection workflows for our customers at the Florida test location. We will continue to leverage the lake for our mission training while further progress for a mooring line and riser inspection now require access to a suitable offshore test environment. We remain engaged with participating organizations and other interested parties regarding the next phase, and the timing will depend on customer budget cycles and site availability. We also reached an important milestone in our manipulation program by completing the prototype of our next generation electric manipulator. Which has a much lower capital requirement for manufacturing supported by our strategy to manufacture in The UAE. We have validated the movement through our software controls architecture, and now functional load testing are underway. With further prototype builds and design refinement planned. This provides an important foundation for future commercial and defense missions requiring autonomous subsea interaction. As we look at the near term market, we are placing greater emphasis on defense and government opportunities. This is not a change in our underlying technology strategy or a move away from commercial markets. Aquanaut, Nauticus Toolkit, and our manipulation technologies can be configured and trained around different commercial government, and defense missions. What is changing is where we see the strongest near term environment for revenue. Defense and government con customers are focused on autonomous systems, subsea awareness, and infrastructure security and their programs are often structured to fund phased development which match our product strategy. This gives Nauticus an opportunity to advance reusable software, sensing, vehicle, and manipulation capability through funded mission work. Aligned with this focus, we have prioritized our defense and government opportunities. During the quarter, Nauticus completed an initial scope of work intended to support the evaluation of a broader multi phase defense project. If awarded, we anticipate revenue this year and into 2027. In parallel, we expanded our participation in next generation ocean sensing opportunities. Nauticus is currently involved in multiple collaborative proposal efforts with government, commercial defense, and academic participants evaluating autonomous approaches to deploying and operating persistent subsea sensing infrastructure. These activities bring together Aquanaut Nauticus toolkit, manipulation, and advanced sensing technologies into broader customer solutions. They illustrate how Nauticus addresses missions that are difficult costly to perform using traditional vessel based approaches. Our solution offers a platform deploy infrastructure that support new forms of long term value for persistent subsea data. Together, these activities represent progress across multiple routes to broad product revenue. Nautica's Toolkit is being validated in real customer operations, Aquanaut is being developed around specific commercial and defense applications. And our manipulation technology is advancing through internal product development and industry collaboration. The work completed during this quarter expanded the way we can bring high value technology to the market. Our increased near term focus on defense and government work is intended to accelerate our progress through markets that are actively interested in development, and deployment of autonomous subsea systems. Importantly, the resulting technology remains not only applicable for defense, but also across the commercial markets that we serve. I will now hand the call back to John.

John Willis Gibson Jr.: Well, thank you, team, for the updates. And before we open, the lineup for questions, I would like to step back from the individual updates you have heard today. Try to put them into perspective. there is no question that 2026 has been a challenging year. The offshore markets developed more slowly than we anticipated. Customer projects have shifted to the right, and our financial results reflect that Rather than waiting for the market to improve, we have taken decisive action. 've reduced our cost structure. We have strengthened our balance sheet. We have broadened our addressable markets and sharpened our focus on the opportunities where we believe Nauticus can create the greatest long term value. Just as importantly, our technology has continued to advance. Nautica's toolkit has now been successfully deployed in customer operations. And we are formally taking that product to market. Aquanaut continues to mature around specific commercial and defense missions, and our next generation electric manipulator has entered functional testing. Increasingly, these technologies are coming together as an integrated autonomous platform. Capable of addressing larger opportunities in subsea autonomy. Critical infrastructure protection, and persistent ocean sensing. Also evolving how we go to market. As Brian discussed, our objective is to build a business with more predictable, higher margin revenue by expanding software sales, pursuing fixed price projects where we capture the economic benefits of autonomy, and ultimately growing recurring product and service revenue. That transition is fundamental to creating a more scalable and valuable company over time. Defense and government markets are becoming an increasingly important part of our strategy. Around the world, governments are investing in autonomous maritime capability. Subsea infrastructure security, and persistent maritime domain awareness. We believe Nauticus has developed technologies that are well aligned with those priorities and position us to compete in markets that we expect to grow for many years. Internationally, we are progressing in The United Arab Emirates. We have secured a facility We are expanding our business entity and are planning for future operations in manufacturing. More importantly, we have developed an outstanding relationship with our partners there, and I remain very optimistic that The UAE become an important regional hub for Nauticus as we expand inter internationally. So while the first half of the year presented challenges, I believe Nauticus enters the second half of 2026 stronger, A more focused company. With a clear commercial strategy and expanding product portfolio and opportunities across commercial defense and international markets. Our priorities are straightforward. Execute, deliver for our customers, convert our pipeline into contracts, and continue building long term shareholder value. Now before we conclude, I would like to briefly address a topic that many shareholders have asked about. We have seen discussion regarding the possibility of another reverse stock split We have no desire to undertake another reverse split. We are pleased that our recent share price recovery has improved our position. Based on where we stand today, a reverse split is not required to maintain our Nasdaq listing. At the same time, we continue to monitor and prepare for any changes to Nasdaq's listing standards to ensure we remain in compliance and well positioned for the future. Finally, I want to thank our employees for their dedication, our customers for their trust, our partners for their collaboration, and our shareholders for their continued confidence and support. We appreciate your commitment to Nauticus. We look forward to updating you on our continued progress in the quarters ahead. And with that, I am happy to open up the line for questions. Operator?

Operator: Thank you. We will now begin the Q&A session. If you would like to ask a question, please press 1 to raise your hand. To withdraw your question, press 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Your first question comes from the line of Peter Gastreich with Water Tower Research. Peter, your line is open. Please go ahead.

Peter Gastreich: Thank you very much. Good morning, and thanks for taking my questions. With the Nautica team, I really always appreciate hearing from the expanded team on these calls. So thanks for the detail there. Yeah. Just a few questions for me. Starting out, it feels like you have been, you know, building toward this in the previous calls but I believe it is the first time that you have kind of stated primary contractor explicitly in terms of a strategy. Now if I understand it correctly, serving as a primary contractor internationally, means that you would be taking on maybe vessel commitments and more execution risk. But could you talk about the trade offs in that primary contractor strategy? And what they mean for your margins and, capital intensity?

John Willis Gibson Jr.: Yes. Brian, why do not you take that question from Peter? it is good to hear from you, Peter. Go ahead, Brian.

Brian Allen: Yeah. So this was 1 of the things which the team brought in as a strategy change relatively recently. Now with regards to the risk element to it, Yes, if you look at primary contracting status where you are actually running your own vessel, it is a lot riskier, but we are not looking to do that. So we are not looking at taking long term charter commitments Essentially, we can operate in a sort of position of vessels of opportunity. I we can bring a boat in for a particular project, mob it up, and then move it on to other projects for the summer, and then demobilize it for the winter, thereby minimizing risk with shorter term contracts. The reason why we get that flexibility is because the more we use our own software systems, in our projects, the greater the margin we actually have to play with. And we are starting to work on focusing on 2 particular types of contract types so we can actually specialize on things which are yeah, fitting to Toolkit. So, again, that further reduces risk because we are limiting our contract types essentially as well as limiting the use of external vessels.

Peter Gastreich: Okay. Great. Thank you. So regarding the, you know, broader multiphase defense opportunity, mentioned with the potential revenue in 2026 and 2027 if awarded. Can you frame the decision timeline and what needs to happen from here to convert that opportunity?

John Willis Gibson Jr.: Let's see what I can do, Peter. Steve's here with me. I might get Steve to chime in. A couple of things have happened, and that is we do have a limited amount of assets. And so we are really focused on deploying those assets to a larger, longer term opportunities. And so we did forego some short transactional work because it would have required us taking a loan contract for a boat. And, we did not want to do that unless we had worked for that boat because that would be taking on for negative margin at the outset. And so we focused in instead on really getting everything outfitted for some of the larger defense opportunities that we see, particularly with the Aquanaut. And we are working towards those and have active proposals in place for the Aquanaut and the defense sector. And we are excited about those. We think those are longer term commitments. Typically, 2, 3 years and longer. We also had some opportunities, with the ROVs for longer term contracts, none of which we are prepared to announce on the call today, but we are out looking at proposals that give us sustained revenue. And so we are trying to be disciplined and not just being, the shotgun approach, whereas you get so urgent, you go out and take short term jobs that, do not produce margin.

Steve Walsh: And so we are unfortunately, it means that we have some depressed revenue. Now here's the other good part, though, is that, and I applaud the team on this, both ROV and Aquanaut team. We have lost no revenue to a competitor.

John Willis Gibson Jr.: Things have been pushed. We are not in a competitive situation where we have any quality control or performance issues with the company. Everything about the operational aspects of the company are excellent at this time, and, we wanna maintain that reputation too because we think that is what gets you into long term sustainable revenue. But, look for us to pursue things where the ROVs are used, over long periods. With excellent customers, and, that those are the proposals we have in place. We will take profitable short term contracts, but, it takes pretty good sized contract for us to mob and demob and put the equipment out in the offshore. Go ahead, Steve.

Steve Walsh: Well, I would also point out that we are seeing more, opportunities where the end clients are requesting us by name for projects that they have coming up. So performing excellent work is always critical. it is what we will do. The addition of tool kit and the performance of the toolkit with the ROV in particular has proven to be very successful. And that will only get better And we are really excited about the future and where we are going and the opportunities that, we are currently pursuing.

John Willis Gibson Jr.: You know, I really like what is happening with Toolkit because we are not out selling a product we have not used. We are, as they say in South Georgia, eating our own dog food. And, it is, it is exciting to see that the pilots the most important aspect of this software is does the operator that is operating the ROV do they think that it makes them more efficient, more effective? And the answer to that is yes. And when you get the guy holding the controller, to give you the thumbs up, I think that is really gonna be what drives this market for us on Toolkit.

Peter Gastreich: Okay. Thank you. And there was some news, last month that the autonomous underwater systems are being used now, you know, operationally in the Middle East, so including on mine clearance in the Strait of Hormuz. Just curious, you know, where do you see Nauticus fitting into that picture, and has it changed the nature of the defense conversations that you have been having?

John Willis Gibson Jr.: Well, Peter, I mean, that is it is interesting. We are actually refurbishing the Aquanaut. We have taken this down period to get them refurbished and ready to go so that we have got good opportunity long term with them. Immediately upon getting them completed, they go back to testing and in Stuart, Florida specifically on mine countermeasures. And, 1 of the more difficult things to do right now is to get a dummy for you to actually go out an image. And so we have been working and secured those recently with a little bit of ingenuity. And so we will be producing results and hope to have the end customer, from the Department of Defense come down and see what we are doing in the near future. I think, we have we have got some work to do on Toolkit and, a bit of work to do to just prove it. But this is the specific task that the Aquanaut is best suited for. There is no question that our imaging hovering that it is just is excellent. Okay.

Peter Gastreich: Great. Thank you. I just have 1 final question before I get in the queue. Did describe that the Gulf of Mexico oil and gas activity is challenging. And of course, you know, previously, there was an expectation that we would see some improvement, and that was in line with what the larger operators were signaling. But does this sort of change or signal any change in terms of strategy and appetite? Just kind of structurally for oil and gas? And can this be something that is kind of nudging you, you know, further in that direction of the other customer types that you have been talking about? In terms of how you allocate the resources and how you kind of envision your, you know, your business building in the coming years?

John Willis Gibson Jr.: it is a great question. I think the oil and gas market is going to be strong for the foreseeable future. I think we have no idea as to how much damage has been done during the, activity in The Middle East over the last year. And so I think prices will be strong, and I think that they will get enthusiastic about developing their resources. However, I think margin could be much better for us on the port security side and the defense side. And so we are seeking margin and not just work. And so while I think it is gonna be a strong market in oil and gas, I think that is going to be a strong margin in the defense side of the of the work. I also did not cover another part of the question you asked earlier. I apologize for, but the UAE, I could not be happier with the discussions that are going on with our partners in the UAE, the master investment group. Highly collaborative, long term focused. Excited about the new manufacturing facility, which we are leasing, in the entity we are putting in place and, strong support just it is a tremendous relationship there, and I think that is an area where our solutions are going to be practical and provide value to that region over the long term as well. So I am excited to be opening up in Ras Al Khaimah, And, our manipulators, which is absolutely critical. There are no AUVs that, autonomous underwater drones in the class of an Aquanaut that have manipulators. And the ability to interact with the environment is differentiated You cannot go and find that on an untethered robot at the moment, and I think that is where we excel, and there is tremendous opportunity for us. Okay. Great. Well, thanks, John and team, and, you know, congrats on, executing your strategy so far this year, and I will get back in the queue.

Peter Gastreich: Thank you, Peter.

Operator: If you would like to ask a question, please press 1. To raise your hand. Please stand by while we compile the Q&A roster. There are no further questions at this time. I will now turn the call back to John Gibson, CEO, for closing remarks.

John Willis Gibson Jr.: Well, we have come to the end of another quarter, and I am incredibly grateful to our employees for their dedication and their commitment, To our shareholders for sticking the course with us. I mean, this company has phenomenal potential, and we intend to deliver it. And I thank you to the lenders, and it is just been a phenomenal effort here and it feels close. And so we are all in here, focused on value to everyone that is put their trust in us. I appreciate it. And, we are going to go and do our absolute best for you. And I hope we are having another call before the next quarterly call to talk about our progress. In fact, we may just I will I will go ahead and commit now that we will schedule an interim 1 as opposed to waiting until the end of the quarter. So that puts work on Kristin and Jimena, but, look forward to speaking to you again. Take care.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.