DPRO

All right. I think to respect everybody's time, I think we will get started here. Again, greetings and welcome to all the shareholders and stakeholders who are joining us on today's Draganfly 2026 Q1 earnings call. My name is Rolly Bustos, and I am the Internal Investor Relations Rep here at Draganfly. We appreciate you, as always, joining us. We will start with our CEO and President, Cameron Chell, recapping the first quarter. Next will be more detailed financial review with our CFO, Paul Sun. We will conclude, as always, by addressing the pre-submitted questions that we have received. I know many of you, as always, anybody is welcome to reach out to me directly at [email protected], I'd be happy to have a conversation. I remind everyone that this presentation may include forward-looking information and statements.

These statements are not guarantees of future performance or financial results, and undue reliance should not be placed on them. Any future events or financial results may differ from what might be discussed here. The company's results and statements are accurate as of today, May the 11th, 2026. We are under no obligation to update or renew these statements outside of material press release disclosure going forward. The full forward-looking disclaimer can be found on page two of this presentation and on the screen right now. Cam, if you're ready, please go ahead.

Great. Thanks, Rolly, really appreciate everybody's time and consideration in joining us on today's Q1 earnings call. Start off with the financial highlights for Q1 2026. Our revenue in Q1 2026 was $2.3 million+, which represents a 49%+ year-over-year increase and about $2.2 million in product sale. That's $347,761 of gross profit. Currently, as of March 31, 2026, we have a cash balance of just over $147 million.

Overall, we're very pleased with the quarter in terms of the year-over-year growth sales, and we continue to take a very pragmatic approach on how we're scaling in to very particular customers that we're targeting to be our base over the next decade. To talk a little bit more specifically about the sales highlights for Q1, we had a number of significant sales, primarily into our military vertical. We did announce at the beginning of the quarter an order of FPV drones from the U.S. Army. This was from an existing customer of ours, which we are continuing to build a very strong relationship with, and we'll talk a little bit more about that later.

We also secured a strategic international military orders for our Commander 3XLs. We also announced a project and a sale along with Palladyne AI, who is on an Air Force contract right now, regarding swarming technologies, incorporating the use of Draganfly drones. We announced a Fortune 50 telecom company purchasing Draganfly heavy lift drones for disaster response. This is actually for lifting cell towers up, either for doing repairs or when systems are down, or in emergency response situations. In fact, they're switching over their entire fleet from a Chinese fleet now and actually into a Draganfly fleet in particular, because of our heavy lift capability.

We also announced Draganfly Outrider sales along with Cochise County and a number of other counties along the southern border, where we provided what we call our Outrider drone, which is a long-range heavy lift drone for doing patrols, search and rescue, personnel support, surveillance, and communication networking. Overall, a really important quarter for us in terms of delivering really important strategic imperatives to very, very select and specific customers that we've been targeting for quite some time. That's gonna continue to be our strategy. We really have the opportunity to be selective right now about who we're targeting into.

The reason that we're targeting those specific customers does lend into a larger strategy around how we're building out our capability and how eventually that beachhead leads to further and further advancements into our particular markets, which are designated somewhat differently from some of our comparables out there. Also, in terms of a financial highlight from Q1, we did close a $50 million U.S. financing, and we're really pleased with the actual investors that came in to that fund. They were by far, I would say 90% were long-only, very well-known, Tier 1 funds that came into that. It really elevated us, you know, from that kind of micro-cap market up into the small, even beginning of the mid-cap market.

We also had new initiation of research on us from some great banks. We appreciate their support and we look to continue to build those relationships. As we move forward, while we're really well cashed up now, we do believe that in the far future, we will have the opportunity to finance at much higher levels as sales will demand that additional growth again. For the remainder of this year, though, we're not expecting that. Strategically, a number of things also unfolded for us in Q1. We did bolster our military and defense capabilities by bringing on two gentlemen who now head up all of our military sales partnerships and initiatives in that regard and business development.

Larry Fuline is now heading all of our military sales, and he's working along with Vic and Keith, who are both former tier 1 operators. Both come out of Deutsche Bank after their tier 1 careers, and have done just an incredible job in terms of helping us continue to scale our business development and sales operations, align that with our production capabilities, our R&D and our research capabilities. I can definitely say that we're operating at new levels with individuals that we're very pleased to work with across many militaries throughout the world, in particular the Department of War right now. Draganfly is uniquely positioned in that regard to support Canada's new CAD 2 billion military commitment to Ukraine.

That's actually since this slide was made, that's actually gone up to CAD 3 billion. As many of you will know is that Canada has actually committed 5% over the next number of years of its GDP to rearm its military. That's a big number. Like, it's certainly not a big number compared to the DoD, or excuse me, the DoW and what they spend. In terms of a mid-market country and what it's spending, it's now amongst the top military spenders in the world. A massive function of what they're doing is on autonomy and in particular aerial and drone autonomy. There's a very, very select few companies, you know, maybe one, maybe two in Canada that can meet this demand.

We're highly engaged at, I would say probably every level of CAF, what they call Canadian Armed Forces and DND, at this time, and working extremely hard in order to progress the contracts that we've been working on with them over the last couple of years. Their requirements are coming out. They have an equivalent of what's called, of what's known in the U.S. as Drone Dominance, the million drone program. It'll be many more than a million drones that are produced down in the States as part of that and subsequent programs. There's an equivalent program up in Canada which we're deeply embedded in as well. We also announced our strategic defense partnership with prime Global Ordnance.

Global Ordnance is, as an example, the largest supplier of ordnance into the Ukraine. They have a strategic view that much of the drone market, at least the drone market they're dealing with, they view drones as an ordnance or as ammunition. As such, they are really building a strategic focus in drones. We're super pleased that they've chosen us as their prime supplier into this market. We've got a couple of dozen major initiatives ongoing with them as well. We have a very large presence, well large presence for us anyway, at SOF Week coming up, in addition to a very large presence with Global Ordnance.

It should be noted that Global Ordnance was just one of five companies that was selected for the Drone Dominance Munition Program as well. We also announced a strategic defense partnership in the Asia-Pacific region. This is with Babcock. Babcock is a large British prime who's very strong in the Indo-Pacific region. We are building very similar to what we're building with Global Ordnance as a strategic relationship as a prime drone supplier, not just well, for a number of reasons, but primarily because of our capabilities across multiple drone platforms. A lot of departments, units, et cetera, are still defining what they are looking for in terms of their drone capability.

What that means is that these primes need to be able to work with an organization that doesn't have necessarily, hey, this is our drone that we sell, it does ISR work, or this is our drone that we sell, and it does logistics work. They're really looking for an organization that has a capability across all these drone systems that's interoperable, and that's turning out to be one of our major strategic advantages. It takes a little bit longer to implement that across many of these units because they're looking at it strategically rather than tactically, what can we get happening right now? We're finding the benefit of it is gaining momentum quickly. A subsequent event which is worth noting is that we were selected by two additional units within the Department of War.

All I could really say is that these are special operation units. What's really important is that they're special operations types units, and these are the types of units that are selecting the Draganfly product. They're selecting it for many reasons, not just because of the company's capability, but also the product performance and our flexibility across that entire product line. We're thrilled on this, and that'll have heavy bearing on exactly what our numbers will pan out for this year. On that note, I'm gonna come back to talk a little bit about our strategy in a bit. I'm gonna throw it over to Paul to actually talk about our results from this last or from Q1. Paul?

Thanks, Cam. Thanks, everyone, for joining. Yeah, I'll just take you through year-over-year comparisons for the first quarter of 2026. Revenue for the first quarter, as Cam mentioned at the outset, was up 49.8% to $2.3 million, up from $1.5 million in the first quarter of 2025. First quarter revenue did comprise of $2.2 million of product sales with the balance coming from drone services. Gross profit $347,761 compared to $310,100 in Q1 of last year.

Q1 did have a one-time non-cash write-down of inventory of $105,800 and otherwise would have been $453,600 compared to the same period last year, where there was a one-time inventory write-down recovery of $38,700, making the adjusted gross profit of $271,400 last year. Taking in all those things into account, adjusted gross margin for Q1 this year was 19.6% compared to last year's adjusted 17.5%. Again, this was a result of products and service mix comparing the two quarters, they were quite similar. Total comprehensive loss for the quarter was $5.7 million compared to a loss of $3.4 million in the same period last year.

This quarter includes the non-cash change comprised of a fair value derivative liability gain of $1 million and that one-time inventory write-down that I mentioned of $105,800. It also included a share issuance cost of $2.4 million related to a derivative liability from the February financing and its treatment on the income statement versus it normally being treated on the balance sheet. The loss would have otherwise been a comprehensive loss of $4.2 million versus an adjusted loss of $3.6 million in the same quarter of 2025. The increase year-over-year is primarily due to higher office and miscellaneous costs, travel and wages. Moving on to the next slide to look at the quarterly table. We obviously just went through the year-over-year comparison.

Here we'll just do a quarter-over-quarter comparison with Q1 of this year and Q4 of last year. Revenue for Q1 increased by 20.9% to $2.3 million, compared to the $1.9 million reported for Q4. The difference was mainly due to higher product sales. Gross margin percentage for Q1 was 15% compared to 4.5% in Q4 of last year. However, again, if we back out that one-time inventory write-down mentioned before, gross margin for Q1 was 19.6% compared to 17.2%, adjusting non-cash items for the previous quarter being Q4. Total comprehensive loss for Q1 again was $5.7 million, compared to a comprehensive loss of $9.3 million for Q4 of 2025.

You'll recall the gain in fair value of derivative liability of $1 million and the write-down of inventory of $105,000, plus that one-time share issuance cost on the P&L versus the balance sheet of $2.4 million. Again, comprehensive loss for Q1 of this year was $4.2 million, comparing it to an adjusted loss of $8.3 million of Q4 last year. The decrease quarter-over-quarter is primarily due to lower office and miscellaneous costs in this case, comparing the two quarters. On the last page here, I think, just going through some balance sheet items. You can see our total assets increased from $101.3 million to $161.1 million, and that's largely due to an increase in cash.

Working capital surplus as at March 31 was $154.4 million, versus the $95.2 million from the end of 2025. Shareholders equity very healthy, $155.8 million at quarter-end compared to $96.6 million at the end of last year. However, if we look at the both working capital and shareholders equity, it would have been even higher if we ex-out those non-cash fair value of derivative liability. Again, very healthy nevertheless. You can see we continue to have minimal debt. As mentioned, our company's cash balance at the end of the quarter being March 31 was $147 million compared to the end of December, which was at $90.2 million.

Again, because of the February financing that Cam touched on earlier on. With that, Cam, I'll pass it back to you.

Great. Thanks, Paul. Great job.

You're welcome.

I just want to talk a little bit about our product lineup because it does speak greatly to a strategic differentiator that we have. Many of the questions I'll be able to address that came in that will speak to this as well. Again, you know, having been around for 27+ years, you know, what we are really good at is delivering what the customer needs.

What we have seen, through the last number of years that we believe will play out very strongly in the coming year or two, is that as the customer gets more and more sophisticated, and this is just isn't military, this is public safety and industrial as well, but it's really emphasized in the military side of things, is that, you know, in the beginning of the cycle, you know, they're looking to understand what drones do, how they can be used, and they've got a specific use case in mind. As soon as you start moving to concepts of operations, how do you have integrated operations? How do you do targeting? How do you do repeater drones? How do you have communication set up? What's your targeting being done with? What is the actual strike capability? How do you rearm, resupply?

How do you support personnel that are in the area? You realize quickly that you don't need a drone to pull off a concept of operations. You need a series of drones. We spend a lot of time upfront because of the 27 years working with this, recognizing that the overall game and dominance in this space is not going to be done by a drone. It's going to be done by a platform. It's going to be done by something that can service a concept of operations. Everything that we do is built in a modular fashion and can take on multiple types of payloads and is all interoperable.

If you look at the, even the basic designs of the drones that we put out, they are all designed to have their own internal payloads, but they all have the capabilities for external payloads as well. Many of the customers that we have coming to us are, some of them, even from the same units within, even with the within the same, yeah, units within units, if you will, trying to be less as specific as I can be. They have different requirements around what their AI does, what type of sensors they want, what type of mapping they need. All of our systems are able to incorporate multiple types of payloads from multiple types of vendors.

If we have one particular sensors that's required, and we need to mix it with another type of sensor, we spend a lot of time doing those integrations with those partners. Now, the added benefit to that is all of those partners also become channel sales partners for us in that regard. Now we are doing some vertical integration of some of those key assets, you know, through some M&A work that we're doing. For the most part, we're very, very partner-centric in order to build those capabilities into each one of these units. Now, each one of these units also operate, you know, with each other, and across separate and different and sometimes diverse communication platforms.

Interoperability across the unit and different branches of the DoD is becoming increasingly important, not just so that they have interoperable capability, but so that they can de-conflict their existing operations or their upcoming concepts of operations. The fact that we can go in and we can offer people, you know, one place to have consistent interoperability, one place to do the maintenance work, interoperable parts, you know, a consistent supply chain. All the things that are really, really difficult in the market right now, we have been addressing upfront. We're really pleased with the progress that we're making there.

In addition to this, you can expect Draganfly to be adding to this product line this year on products that we have been working into the concepts of operations over the last couple of years. One of the advantages that we do have in the market is because we have been around so long, we are able to field an entire product line. It generally takes a couple of years to get a new product into market. Now, pretty much anybody can slap some propellers on an airframe and throw it up in the air. That's a long way from actually getting something to a TRL 9 or something operational that can be worked in a very harsh environment, much less in conjunction with other systems out there.

While other companies, I do believe, are going to be moving into additional product lines, and I don't mean going out and necessarily just buying another company and bolting on something. I mean, actually building it so that it's interoperable. You know, it just takes a lot of time. I think we've got a step up in this regard. Now, I 100% I believe that our comps out there are going to be very successful in the market, if not just generated by the incredible demand signals that we're getting, not just in the U.S., not just in allies, but across even developing nations right now who are all looking for that asymmetric capability. This is still a relatively very inexpensive capability compared to what the alternatives are out there in the market.

This is really important to us and a big part of our strategic differentiator. Of course, the other strategic differentiator that's working out well for us is the fact that we manufacture on both sides of the North American border. We've got great representation in both countries. As we go abroad, in many of the international opportunities out there right now, often, you know, the credibility, the fact that we are selling into the Department of War right now, meeting those standards, et cetera, but then are actually approaching it maybe from a position of a European or Canadian type of provider that also provides us some great sales opportunities as well. Overall, a really positive quarter for us.

It has laid the groundwork for what we expect to be some really outstanding quarters coming forward. On that, I am gonna open the Q&As that came in. If you could just give me one quick second here. Appreciate your patience. I'm reading these directly from Well, there's only six or seven of them. One of the questions that came up here is, are you gaining traction with the Canadian government military for orders? I was hoping something would have been announced after the end of March budget cycle. Can you comment? Yeah, certainly.

We're super deep on, I don't think I'm over-exaggerating by saying probably every level of CAF, Canadian Armed Forces, and Department of National Defence, in Canada, politically, bureaucratically, operator-based, et cetera. There are about four or five significant programs that have been announced through Canadian DND. We are participating in all of them. We're well-positioned, I believe, in all of them, presently. In fact, the big CANSEC conference is in two weeks. We have two separate sets of exclusive and private demonstrations that are happening at request. In addition to, you know, all the, I'll call it the Drone Dominance or what's called MINERVA up in Canada programs, the Arctic military programs, et cetera, et cetera.

We continue to take a pragmatic approach. We've got our manufacturing set up up there and, you know, I think we're meeting that challenge honorably and on target at this time. Like I say, the budgets up there are significant. Just given the fact that there's so few less competitors in that regard, we think we're well-placed.

Second question here is, are you going to participate in Drone Dominance Gauntlet II? The answer is yes. We participated in Drone Dominance Gauntlet I. We were down selected in that. We did not make the final grade. There was some nuance as to why that didn't happen. We were only scored on two of the three challenges there. We still only just narrowly missed it. There were some circumstance of why we were not able to participate in three. Given that, in my opinion, we most certainly would have made it. We're very, very excited about Gauntlet II, about what we can bring to the table, what our capabilities are. Again, because we bring so much operational experience to the table from the work that we've done abroad, in particular in Ukraine, we think we're well suited for this.

We seem well cashed up, but I'm afraid of further dilution. Do you expect further raises, or can you be specific on what scenarios you would go back to market? That basically right now would be M&A scenario or massive orders. Even really big orders right now at this point, with cash on hand, it's not a reason for us to finance. We do have some very meaningful M&A ongoing. We do expect to make some of those announcements upcoming. A couple of them are such large size that we could potentially go back to market for those. That'll be dependent on how the market's doing, what that dilution might be and the accretive nature of hopefully what our shareholders are rewarded for these particular acquisitions.

We have been very pragmatic about what we're looking at in terms of acquisitions. I am happy to say that these would be significant revenue and EBITDA adds. That said, that's not why we're buying them. We're buying them to execute on the interoperable strategy and the capacity capability, which lends to our ability to innovate more quickly and secure our supply chain more succinctly. We've been very disciplined about that. We've looked at, you know, well, hundreds is an exaggeration, but dozens and dozens of opportunities. We've narrowed it down to a couple that we've been moving forward with.

What revenues are you currently getting out of Ukraine? It's nominal. Specifically from Ukraine, I would say that the answer is very nominal. In terms of Ukraine purchasing equipment being sponsored by other countries that are purchasing on behalf of Ukraine, we do expect that to be meaningful. We have not built that into our consensus for this year. If anyone doesn't know, we don't at this point give guidance. However, we think that there's really solid consensus out there amongst the analysts right now. We're very comfortable that we will hit consensus this year. Our consensus is based on orders and contracts that we have in hand currently. They are not based on home runs, or a Drone Dominance, or a MINERVA, or a big sale in Ukraine, or any number of the other dozen plus, you know, outlier type projects that we're well down the path of.

Again, we just feel that, at this point, in order to build strong credibility, not just with the market, but very importantly with our customers, is that we're not trying to overpromise. We're really trying to be pragmatic about our approach to it. We've, like I say, we've been around for 27 years. We're not chasing the next quarter, at least not yet. We're probably a couple of years away from worrying about what happens next quarter. Right now we're really establishing ourselves strategically so that we have a base to ensure that we can be, you know, doing very, very significant revenues in the relative near future. Drone sector is currently seeing record budgets for DAWG, D-A-W-G. Please describe how Draganfly is positioned across different categories of spending and what is likely the most significant near-term revenue opportunities. There are certainly the big, you know, RFPs out there like a Drone Dominance, and there are a number of those out there, from the Marines, as an example, also in other nations, as an example, which I've spoken to a bit. We're chasing those, and we think we're well-positioned. You know, it'd be naive to say, oh, we're gonna win all of them, but we're gonna win our fair share of them. I'm confident in that. Maybe even hopefully more than our fair share of them.

That said, in terms of the specific military opportunities which we, which this whole call seems to be skewed towards, if you look at something called Executive Order 44087, that's where O-6 and O-5 command level personnel can be making purchasing decisions. I think it's really important to watch some things like the Army Marketplace, the Marine Marketplace. These are Amazon type closed websites where O-5 and O-6s can go in and make purchases. These are coming to bear later in the year. I think you're gonna wanna watch really closely who are the first movers who are chosen to be on that.

Pre those coming out, that Executive Order 44087 is a really important order because if you look at, you know, the O-5s and O-6s, many of which are in Special Operations that are making the early decisions now, who are they choosing? Evidenced by what we talked about earlier in the presentation. The sales that we have made in first quarter, that's where we continue to win. Most important for us at this point is to continue to win in our military business, is to continue to win with that warfighter, to continue to win with that O-5 and O-6. The operators need to believe in the equipment and the people that are building the equipment and supplying the equipment, understanding the concepts of operations.

That's where we're really spending our time right now. Again, a little bit slower, a little bit more pragmatic. I'm not saying what anybody else is doing is wrong, but if this is where we find that we can exercise the skills that we have, the capabilities that we have, the best. Again, because of the different personnel that we have and the longstanding experience. Draganfly is sitting on $40 million in cash, and the stock's trading relatively low. I don't understand. They're saying less than $2 a share, but that's not quite true, obviously. Maybe they're talking enterprise value.

Can you help investors understand why the market is undervaluing Draganfly compared to all other drone companies, where Draganfly could be in a commanding position compared to some of your counterparts? What do you see as the clearest path forward in the next six to 12 months in closing the gap of investor confidence? Man, that is a great question. We are very aware of this, and I think it represents an incredible buying opportunity in Draganfly. If you're looking at an organization that's not chasing the quarter, but building something really sustainable across a strategy that's around understanding what are the longer term concept of operations and how are they gonna have to be met by a particular company, that's likely why we're a bit of a laggard in this space. We recognize we are.

We're not panicked by it at all. We've seen seven or eight drone cycles in the past. Of course, nothing like this. Every single time everybody's been bigger, everybody's been smarter, everybody's had more cash, everybody's, you know, got the better engineers, the better, you know, whatever the case is. Every single time they're all gone and Draganfly's still here. I don't think in this particular cycle everybody's gonna be all gone. There's some really great operators out there, and they're doing a fantastic job. I do get a sense a little bit more that, one, they were cast up sooner, so they're three or four quarters ahead of us in terms of maybe some of that cycle. Also their strategies are a bit different.

Again, not saying their strategies are wrong, it's just not a strategy that lends to what we want to build and where we think we'll be an ultimate one of significant dominant players in the space. Those strategies might be larger acquisitions, unrelated acquisitions, you know, revenue-based acquisitions that, you know, maybe some, you know, sales between companies that, you know, help those revenue numbers bolster those revenue numbers a bit. Again, all not bad strategies, all can work. For us, you know, our capability is really based on in-the-field work, you know, proving out that product and working from the ground up. Now, I do think we have some great top cover. We've made some incredible resource acquisitions or hires in the last, you know, six months.

I think we have an incredibly strong board that also has a very pragmatic approach to what the militaries around the world, in particular the DoW, want to see and how they want to be treated. What type of company that they wanna deal with. Again, not saying that the other companies are not the types of companies they wanna deal with, but our capabilities lend to this particular strategy. I think that I think it represents an incredible buying opportunity in Draganfly right now. When you compare our capabilities with the other capabilities that are out there, it's just a matter of time before that revenue number, more than, in my opinion, catches up and probably surpasses maybe where a number of others are. Maybe not all of them, but certainly where a number of the others are.

The press release on Friday, the eighth, was pretty vague, but exciting. Any color on what potential size these deals might be? The press release on Friday was about two additional sales into Department of War units. All I can say is that they were special operations type of units. Two things. First of all, these are the leading types of units that other non-special operations units are looking to in terms of what capabilities are they building and who are they choosing to build them with. In the bigger picture, you know, the potential size of them is much larger even than just the size within these specific units.

However, what we have seen is in the units that I would, you know, loosely call us embedded with, we definitely have one unit that we are entirely embedded with. The other ones that we are being relied on as a preferred vendor and partner, we continue to see every single month their orders going up, but not just their orders, their actual requirements changing. They're coming to us because, hey, we've got a requirement change. We have an idea. We wanna do this. We've got a budget for that. Can you guys pull this off? Can you put people in this situation, and can we design something together? The potential size of these things certainly is in, is well into the tens of millions, if not more, just within units, right?

Again, this has got nothing to do with the RFPs out there or the larger programs which we're also participating in. Not to be vague. I think it's understandable why we're required to be vague on many of these things. The numbers will prove themselves out. On that note, I hope we've been thorough enough for everybody today. We really appreciate the time and consideration. As always, we want to throw our thanks out to our people in Draganfly, to our shareholders, and of course to our customers. Whether they're in public safety, industrial, or on the military side, we appreciate the freedom you provide for us and the quality of life.

On that note, we continue to look forward to be of service, saving time, money, and lives. Thank you for your loyalty and your attention today.

Welcome everybody to our call today. I'm just gonna give it a minute here while people start to file in, and then we'll get started. All right then. Just so make sure we keep on schedule. I think we will get started with today's call. As always, greetings and welcome to everybody, to the shareholders and stakeholders to today's Draganfly 2025 Q4 and full-year earnings call. My name is Rolly Bustos, and I am the Internal Investor Relations Representative here at Draganfly. We appreciate you all joining us today. We will start as usual with our CEO and President, Cameron Chell, recapping the fourth quarter and full-year earnings highlights. Next will be a more detailed financial review with our CFO, Paul Sun. We will conclude by addressing the pre-submitted questions that we have received.

Though I know I talk to many of you often, as always, you are welcome to reach out to me with questions directly at [email protected]. I remind everyone that this presentation may include forward-looking information and statements. These statements are not guarantees of future performance or financial results, and undue reliance should not be placed on them. Any future event or financial results may differ from what might be discussed here. The company's results and statements are accurate as of today, March 24, 2026. We are under no obligation to update or renew these statements outside material press release disclosure going forward. The full forward-looking disclaimer can be found on page two of this presentation. Cam, if you're ready, please go ahead.

Great. Thanks, Rolly. Appreciate that. Thank you everybody for taking the time and your consideration to be here. We appreciate you as shareholders of the company, enthusiasts and maybe even some fans. Certainly if there are any of our team members, employees or customers here, we deeply appreciate you. First and foremost, we want to just throw out all our blessings and prayers to all of those who are fighting for our freedom today and those who are in service and away from their families. We wish them Godspeed. Q4 and year-end highlights for 2025.

2025 was a really solid year for us, in terms of, in particular building on top of, our infrastructure in preparation for, the I'll call it the predetermined revenue ramp that, we will be experiencing throughout this year, and certainly into 2026. We did have record revenues in 2025. We were up 17.8%, and closed off the year with $7.7 million. We had gross profit of $1.3 million on that, which we're pretty pleased with given, all the R&D and all the, additional, work that we've been doing, into our systems, and trying to do our best to over-service, our customers. We ended the year with a cash balance of about $90 million.

Strong balance sheet for us to continue to build on as we move into 2026 and 2027. A few of the operational highlights for us this year and there were many, but in particular, Draganfly unveiled a new product line or a new product within our product line called the Outrider. This was particularly built for the Southern Border multi-mission agenda or concept of operations. The Southern Border sheriffs have a very unique situation in terms of securing the border. Now, a lot of the border flow in terms of just the mass migration coming through has been stemmed. However, the human trafficking, the firearms, the drugs has actually become more intense.

The Southern Border commitment that our sheriffs have down there is actually even more imperative now than it was before. From a Special Operations Command, we were referred into the Southern Border sheriffs and in particular to Cochise County. Now, Cochise County is renowned as a Southern Border sheriff county. They secure much of the entire Arizona border and the New Mexico border with covert cameras, an incredibly built from the ground up AI system and covert camera system that they built themselves. Now, when they get a hit on these cameras, the challenge is they've got up to two hours to get to that location.

Their AI system is really effective on identifying if it's human trafficking, if it's drugs. They can even have a sense of what cartel it's coming from, or even or if it's firearms or a combination of any of those. They've got to deploy resources into that area. They've been experimenting for a couple of years with drones to be able to get to that area long before personnel can get to that area, whether that's by, you know, RZR, ATV, horse, or four-wheel drive. Often it takes up to a couple hours to get there. By the time you get there, the, you know, your situational awareness and the actual theater that you're operating in has changed dramatically. They wanted to get drones to that location.

However, the majority of drones that were available to them, especially in particular the multi-rotor drones, really only had 30-40 minutes of flight time, which is enough to kinda get you there maybe. Doesn't leave you any dwell time, and certainly doesn't give you enough time to get back. Also, the smaller drones, they really don't give you the ability to interdict it, and really only provide ISR, so intelligence, surveillance, and reconnaissance, which is still hugely valuable. The concept of operations that they challenged us with was, how do we have a drone system that can get, as a responder there quickly? How can it stay, on task, for a long enough time? And how can it do multi-mission? Multi-mission might be not just doing ISR, but can it interdict, actually hold people in place? Can it act as a communication hub?

That particular area is famous for very challenging communications dead spots, wild temperature swings, very large differentials in altitude, thin air, et cetera. You're starting at about 2,000 ft above sea level, and then you're going up from there. Your performance on your motors is quite a bit different. There's a lot of variable factors in there. We spent actually a couple of months working with them, embedding what we call our ITS team, so our Integrated Tactical Solutions team. They spent time on horseback in razors understanding the use cases, the concepts of operation.

We went to work with the sheriffs designing a drone platform that would enable them to be able to execute on all the missions, which isn't just interdiction and law enforcement, it's often search and rescue or personnel support. What we designed with them, excuse me, was a drone system that could do everything a fixed-wing drone could do, meaning it could stay up for multiple hours, and it could do everything the multi-rotor could do, which means it could actually carry things into place. Because a fixed-wing drone doesn't really have a lot of payload capacity, also takes up a lot more room to operate, and generally can't work in as adverse weather conditions, which are quite varied in that particular area.

What we designed for them was the Outrider drone. Now, this is a drone that can stay aloft for seven hours, and it can carry up to 100 lbs. It can be a communication hub, it can be an interdiction device, it can be a search and rescue device, it can be a resupply device, and certainly can act as a very sophisticated ISR device. They've got the best of all worlds when they did this. Now, the reason that we were able to deploy this very quickly is because Draganfly is one of only a very few companies, maybe arguably two, that have an entire product lineup. Everything from small FPV attritable one-way drones, suicide drones or sometimes called, that can be as small as five inches, right up to something as big as the Outrider, which is nine feet across.

We took our heavy lift drone, which was an all-electric drone, and we actually built on top of that platform two diesel engines, a number of other modifications that gave it the capability to stay up for that amount of time and have that payload capacity. It also is interoperable with all the rest of our drone platforms. When the sheriffs are training on one platform, they have the capability to actually fly the other platforms as well. Often, you don't need a 9-ft drone that can carry 100 lbs if you've got an AI camera hit something that's closer, or if you've got a unit that just happens to be, you know, on the seat beside you in the truck, you just wanna grab it, throw it, and get eyes on the situation.

You might only need 40 minutes of flight time in that case. All of these things are connected. They all provide multiple views to multiple different command centers. It might be search and rescue, it might be the sheriffs, it might be the local PD, you know, whoever the case may be. It might be border management or border control. They've all got eyes on this as well. This particular project has been extremely successful for us. We're really, really proud of the work that we did there, and we're very, very grateful to the sheriffs for trusting us and doing this work with us. Now, the nice thing that's come out of this is we now have a border solution.

We have a very unique solution that's just not an eloquent piece of equipment that's integrated into law enforcement, but it's also a piece of equipment that was designed with the concept of operations in mind. We've got the experience working with the sheriffs in order to understand what are those operational requirements. That is expertise that we're now able to take into several border opportunities in multiple countries, multiple jurisdictions around the world. It's really become an area of expertise for us. The next thing that I wanted to mention is that we continue to resource up the company. We're very, very fortunate to bring on Victor Meyer and Keith Kimmel. Victor's a former Navy SEAL.

Keith is a former Top Gun, both with incredible careers, highly educated, also very strong capital markets and sales backgrounds. They are leading our military board of advisors, which effectively is they're leading our sales efforts within the military right now. What we have seen is them bringing an incredible amount of expertise. Again, not that they didn't have great drone expertise, but what they really had was operational expertise and contacts that trusted them. We are learning so much from them and the organization that they're building within Draganfly that allows us to deliver solutions as opposed to just hardware or software. A really hot topic as many of you know, over the last maybe week or two has been swarming. Now, swarming is a really important part of the drone ecosystem.

In particular, it's had some attention over the last couple of weeks. You know, we've been doing swarming work. In fact, we've been building FPVs within our company for over 15 years. An important story that a lot of people don't really know is that it was the U.S. Marines that developed FPVs, and they introduced them into Ukraine in 2022. Of course, the Ukrainians have taken it to an entire new level. It was the U.S. Marines that designed FPVs into battle plans. In fact, two of the folks that did all that original training work and much of the initial design work are now part of Draganfly. The swarming has always been an important component of what's going on. We're very fortunate to partner with multiple different swarming technologies.

In particular, we're really excited about what Palladyne AI is doing. They've got a very sophisticated swarming system. They've won some recent contracts, which we also made some more recent announcements with just in the last week, talking about who we're servicing with those contracts, their military contracts, and how those are being integrated into the Draganfly line. Now, our view of swarming in some AI software is we view it very much like a payload. One of the things about the Draganfly line is that it has dozens and dozens of integrations. Often what happens is a customer shows up and they're like, "Hey, we need this particular surveillance camera," or, "We need this particular AI system," for whatever, you know, concept of operations that they're working on.

What works really well with the Draganfly system is that as we have all these different integrations, we have a platform that's multi-mission that can service that particular customer with their exact requirement. Palladyne is a very important part of that, and we're really enthusiastic about the software and the work that they do and the contracts that they're winning, and that we are winning together. We did showcase at the Advanced Drone System at AUSA. That was a really big show for us. We did have a large Ukrainian contingent of military folks come over, participate, speak, workshop, and we had a number of the dignitaries from the DOD there as well.

We performed a meaningful strategic planning session there, and we've seen, you know, a tremendous amount of things unfold since that show. Draganfly announced a strategic partnership with Defense Prime Global Ordnance. Global Ordnance is one of the largest DLA primes out there. They're really well known for their ordnance work. They provide about, you know, 80%-plus of the ordnance into Ukraine. They have an incredibly strong push into drones. They understand that in many cases, the drone is the ordnance. Not just in small FPV, but in larger formats, in swarming formats, in fixed wing formats. I believe that they are going to be one of the dominant DLAs in the drone space. We have a very strong partnership with them.

We're integrating deeply with them and are working hard to ensure that collectively, that they are a DLA featuring Draganfly product capabilities, Draganfly's technology into their ecosystem as one of, if not the largest ordnance provider in the market today. Draganfly, we also deployed with Autonome a landmine clearing mechanism. They have a carpet that lays out and then has a number of explosives on it and very, very quickly clears landmines and creates a path or a road. We integrated with them on our heavy lift drone, where the heavy lift drone actually takes the carpet, lays it down, rolls it out, right?

Backs off carpet explodes, takes out all the landmines, and then we lay the next one on top of it, and so on and so forth, and then it collects all the actual Autonome landmine carpets. We've had some great success with it. They're getting some significant traction in many areas of the world, and that's an exclusive integration that they did with the heavy lift. Look, one of the advantages that Draganfly or one of the differentiators, excuse me, that Draganfly has, because of our 27 years of experience, we really focus on those integrations. Again, whether it's camera systems, whether it's radio systems, whether it's having partners like Autonome Labs or Palladyne work with them, they're all looking for ways to deploy their technology.

I would say that we are certainly really strong in our ability to integrate those technologies so that the Draganfly product line has as many options as possible. In addition, those partners of ours become a channel reseller for the Draganfly line. We're gonna continue. You'll continue to see from us lots of integrations, primarily in the public safety and in the military space, but also in the commercial space. We have multiple energy projects on the go right now where we're integrating very, very specialized either sensors or tools in the energy space on that Draganfly line. Again, the reason that we typically are winning those types of integrations is because we've got a product lineup that one can carry those types of tools. It's big enough drones.

It's not all just these small ISR drones, but there's also multiple sizes of them. Sometimes you need two types of tools, but you don't need a 9-ft drone carrying a smaller tool. You might need our Commander 3XL, which can carry 22 lbs to go up and do some of the tooling for the equipment that's on a power line or a windmill or on a pipeline. To that measure, we had a Fortune 50 company, which happened to be a telecom company, purchase our heavy lift drones, in fact, standardize on our heavy lift drones, in particular for standing up cell towers post-disaster. This particular company, which is a household name, is now standardized on Draganfly. We're deploying drones with them on our heavy lift and on our Outrider, both tethered and untethered, in order to stand up cell phone towers.

Now there's multiple other applications that they're looking at doing as well. Once we got the initial orders from the Southern border sheriffs, we actually launched a significant demonstration for multiple agencies down on the Cochise border. We showed, demonstrated the concept of operations. We actually demonstrated three or four different concepts of operations. It was that particular event that's now led to multiple jurisdictions, both national and international, that are looking at and or engaging with the Outrider drone as their border protection standard. Again, it's a brand new greenfield opportunity that we created with our partners because we're willing to take the time and we're really strong at being able to go out and do that integration type work. First of all, understanding what the customer is looking for.

We have secured a number of military orders as well from the Department of War. This strategic international military order for a Commander 3XL would commensurate with that as well. We're seeing uptake not just from the DOW and also from the DND or the Canadian Armed Forces, CAF, but multiple military forces around the world. They look to, in particular, as you would expect, you know, what is the U.S. doing? What is the U.S. adopting? The credibility that we've been very fortunate enough to build within highly specialized special operations units, which you've seen by some of our press releases in this last quarter, are really lending to our credibility to be able to sell internationally as well, which has actually been a really pleasant surprise for us.

We are, to that note, we do have some significant partnerships in the Asia-Pacific region. As we look at the different areas in the world where drone adoption is either in place or where the next places that they are really going to be adopted quickly, we have been pulled into many opportunities in Asia and Southeast Asia, probably with countries that you would expect, but also many other adjacent countries who are looking at the asymmetric situation in terms of combat theater of warfare and understanding quickly that they've got to try to catch up with this curve that's happening of every military in the world right now is rearming and they're rearming with asymmetric capabilities in mind. Asymmetric in terms of cost to build, cost to deploy, and maximum effect for dollar spent.

Not only that, but the actual strategy and tactics that these new asymmetric tools en masse are bringing to the table are actually providing them with an advantage. Now, just because everybody else is doing it's kind of like everybody else has to be doing it as well, which I'll talk a little bit about in a minute as we talk about the Middle East. We also did receive another meaningful, very significant order win for us of FPV drones from the U.S. Army. We'll continue to see many of these from individual units and brigades and special operations commands as they get more and more exposure to the Draganfly product, the Draganfly team, and the work that we get to do with them in order to purpose build en masse equipment that is very specific for their needs.

Then, of course, a subsequent event that happened, which we're very grateful for, is we closed a $50 million registered direct offering, which was a no warrant straight common deal. Just for a super quick review, our product lineup does not have the Outrider on here. Just haven't updated the deck. My apologies. It goes everything from the Flex FPV, which is a very, very unique FPV that was designed in Ukraine from our experience over there. We've been boots on the ground since 2022 in Ukraine. This particular drone is winning a ton of business with folks that get time on the stick because they understand the different capabilities that it has as opposed to just a typical drone. It does work extremely well as an ISR drone as well.

It's got multiple capabilities in terms of you can change the blade and arm sizes on it. This particular drone can carry anything from 1 lbs up to 6 kg, anywhere from 1 km up to 10 km. Of course, you put fiber on it. We could go further. The APEX drone is a drone that would be a replacement for any of you drone nerds out there for the M30 drone. The M30 is the DJI drone that's the second-best seller that they've got, or the M30 or the M350 series. The Mavic, the small ISR, is their best one. You will see an announcement from us on that very shortly. That's relatively public news. I'm not telling anybody that that isn't out there already. We're not displaying it here yet.

There will be a product announcement on that coming, which we're really excited about. This particular drone here can carry 6 kg, it can fly for about 40 minutes, can carry multiple payloads, and again, fits into that multi-mission mode. What we've learned from 27 years of experience is it's great to have a single-purpose drone, which could potentially be something like the Flex, but even that does ISR, or something like a DJI Mavic or, you know, some of the other great ones out there like the Teal or the X10. Again, even with the one that we have coming out, it does multi-mission. The more experience that drone teams get with these, the more that they wanna have them be able to do more than just one thing.

It's extra weight they're carrying, it's extra things they have to worry about, it's cognitive load, and so they wanna have one platform. Typically, the more experience they get, they can do more than one thing. The Commander 3XL is a 22-lbs drone. It can carry about 22 lbs. Actually, it can do much more than that, but we keep it under the 55-lbs weight limit so that it's easy to qualify a Part 107 license. But this is a drone that's the workhorse of the unit. There's really not much it can't do in terms of missions. It's great for dropping FPVs from it. It's great for dropping ordnance. It's fantastic for doing logistics.

It's just a big flying battery, so it's got terrific sensor capability, unbelievable ISR capabilities, and we're just seeing a ton of success with it. The heavy lift drone, this is a 9-ft drone, flies for about 40 minutes, can carry 67 lbs. Its variant with two diesel engines on it. Actually, the Commander 3XL can come with a diesel engine variant as well, so it can stay aloft for up to three hours. But the heavy lift drone with the diesel engine variant on it can stay up for seven hours and carry up to 100 lbs. You know, some really great capabilities.

You know, when a particular unit, whether it's public safety or whether it's military, looks at the drone lineup, they come to realize, "Hey, wait a minute. We can solve all of our concepts of operations that we need, and we can come up with other ones as well because we've got variability in what we do." Now, why this is really unique is that it takes a couple of years at least to actually field a new drone system. While some other fantastic companies out there have been able to field a great, you know, small ISR drone, and they've stayed focused in that area for the most part. For them to build an entire lineup of drones, regardless of the amount of money that you've got, it just takes time.

Because we've been around for 27 years, that's why we've got the full lineup. This is nothing new that anybody hasn't heard before, but certainly, there's been some events recently that have probably significantly grown the global market. The amount of inbounds, and I'm sure you've heard this from other drone companies as well, the amount of inbounds that are now coming in from the Middle Eastern area because of obviously the unfortunate war in the region, is enormous. What's really unique about this is that each of these jurisdictions over there, they want their own capability. Much like, the allied forces, the U.S. in particular, has taken a posture of, "We need to manage our own supply chain. We can't be at risk, from global supply chains.

We have to have our own technology. All these other jurisdictions are adopting that same posture. Now previously, for most defensive type of equipment, most jurisdictions cannot adopt that posture because they can't afford to build it themselves. They can't afford to research it. They can't afford to test it. They can't afford to build the expensive facilities required for these very elegant precision weapons or equipment out there. What we've done now is we've entered into a realm of mass precision, and that mass can be built very inexpensively.

You've got all of these jurisdictions out there now saying, "Well, we wanna build them ourselves so that we can afford ourselves that same protection through the supply chain, but also maybe have our own unique capabilities as well," which might be regionalized or might be nationalized for their own particular reasons. For that, I think what you've seen is, in particular, the North American drone companies have seen a swell of demand from that region over there in terms of, "Hey, how can you bring not just your device technology to the table, but your manufacturing technology, your experience in the field, et cetera, et cetera?" This drone market continues to shock me in terms of how big it is, and every time it gets a little bit bigger, it's like the internet.

Once you've got one use for it, you know, then you realize there's two or three other uses or other people can. The more it propagates, the less expensive it gets for other people to propagate. You know, we're in a ten-year super cycle around drones, which is, in my opinion, a subset of autonomy. And it's really being driven by policy by every national government and every military in the world right now. Unprecedented. At this point, what I'd like to do is I'd like to turn it over to our CFO, Paul Sun, to run through our financial highlights. Paul?

Yeah. Sounds good. Thanks, Cam, and thanks everyone for joining the call. Appreciate it. Looking at this brief income statement here, I'll take you through year-over-year changes. As Cam mentioned at the outset, revenue for the year was up 17.8% from 2024. Full-year revenue comprised of the $6.86 million from product sales, with $861,000 coming from drone services. Gross profit was $1.32 million for the year, compared to $1.39 million from last year. This year's gross profit included a one-time non-cash write-down of inventory of $259,000, while last year's gross profit included a non-cash adjustment of $627,000 related to inventory.

Excluding these adjustments, gross profit decreased by $444,000 year-over-year. As a percentage of sales, adjusted gross margin decreased from the 30.9% in 2024 to 20.4% this year, and sales mix was the main driver here. Total comprehensive loss for the year, including all non-cash items, was $22.9 million, compared to a loss of $14.06 million last year. The comprehensive loss for the year ended December 31, 2025 included non-cash changes comprised of a loss in fair value of derivative liability of $2.64 million. As a quick reminder, that's legacy back to a financing we did that is in a different currency than our reporting currency, so we have to report it as a liability.

We had a recovery of an impairment of notes receivable of $69,000, and that write-down of inventory of $259,000. Otherwise, we would have had a comprehensive loss of $20.1 million versus last year's $15.3 million, excluding that year's non-cash items. The largest contributor to the year-over-year change was an increase in office and miscellaneous wages and travel as we scale up the business. Following that, adjusted comprehensive loss per share this year would be $1.28 versus $1.46 that you see here, compared to the adjusted loss per share of $0.485 versus $0.445 last year, respectively, again, as shown here. Cam, if we could just move to the next slide, please.

I'll do a quick snapshot of Q4 2025, doing a year-over-year comparison to Q4 of last year. Here, revenue for the fourth quarter was up 18.5% to $1.91 million, up from the $1.61 million in the fourth quarter of 2024. Fourth quarter revenue comprised $1.8 million from product sales, with $108,000 coming from drone services. Gross profit was $85,700, compared to $215,700 in Q4 of last year.

In Q4, this year had a one-time non-cash write-down of inventory of $244,000, and otherwise would have been a gross profit of $329,700, compared to a same period last year, where there was a one-time inventory write-down of $167,000, making the adjusted gross profit there $383,200. Adjusted gross margin for Q4 was 17.2%, compared to last year's 23.7%, and this was a result of products and services mix comparing the two quarters. Total comprehensive loss for the quarter, $9.3 million, compared to a loss of $4.7 million in the same period last year.

This quarter includes non-cash changes comprised of a fair value of derivative liability for the quarter of $788,000 at a one-time inventory write-down of $244,000, and would otherwise be a comprehensive loss for the quarter of $8.3 million versus an adjusted loss of $3.6 million in the same quarter for last year. The increase in loss primarily due to the higher office and miscellaneous costs and wages. We'll stay on this page, and we'll this time do, since we just did a year-over-year comparison for Q4, we'll now do a quarter-over-quarter look at Q4 this year versus Q3 of this year. Revenue for Q4 decreased 11.3% to $1.9 million, compared to $2.15 million for Q3 of this year, mainly due to lower product sales.

Gross margin for Q4 was 4.5%, compared to 19.5% in Q3. However, if we back out that one-time inventory write-down that we mentioned earlier, gross margin for Q4 this year, 17.2% compared to 21.5%, adjusting for non-cash items in the previous quarter. Total comprehensive loss Q4, $9.3 million, compared to a comprehensive loss of $5.43 million in Q3 of 2025. Please recall we had that fair value of derivative of $788,000, the write-down of inventory. Q4 2025 comprehensive loss would've been $8.3 million, versus a loss of $3.54 million, excluding non-cash adjustments in Q3 of 2025.

Again, increase in loss is primarily due to higher office miscellaneous costs and wage costs as we continue to scale the business. I think last slide here, Cam, is gonna be a quick shot of the some items on the balance sheet. Yeah, great. So you can see total assets here increased from $10.2 million to $101.3 million year-over-year, which is largely due to the increase in cash. Working capital surplus at December 31, 2025 is $95.2 million, versus $3.8 million from 2024, so quite strong. However, working capital would've been a surplus of $95.7 million, and shareholders' equity would've been $97.18 million if we versus the $96.5 million shown here if we X-ed out the non-cash fair value of derivative liability of $492,000.

Last year's adjusted working capital would have been CAD 6.04 million, and shareholders' equity would have been CAD 6.81 million. Again, up strong year-over-year, and you can see we continue to have minimal debt. As Cam mentioned at the outset, cash at the end of the year was CAD 90.1 million, compared to CAD 6.2 million at the end of last year, 2024. Of course, our current cash balance is higher even still following the $50 million raise that Cam spoke about earlier. With that, Cam, I'll pass it back to you.

Great. Thanks, Paul. Great job, as always. What I'm gonna do is, I'm gonna go next into a bunch of questions. Just stop sharing there if that's okay with you guys. Let me jump into a bunch of questions that have come in. The first question that came in is, you've had a lot of meetings with the government and military of Canada. Do you see meaningful contracts coming from that? Well, we're sure hopeful.

The Canadian Defence Industrial Strategy is a paramount and monumental document put out by the Canadian government that outlines the Defence Industrial Strategy and the CAD 78 billion, I believe, maybe it's even higher than that, dollar spend over the next five years that the Canadian government is doing as it relates to Defence. A very large portion of that is scheduled to go into drones, in particular into Class I and Class II drones. There's, you know, two manufacturers of drones in Canada in that category. Neither of our product lines cross over with each other. We have been very, very active with the Canadian government over the last year.

In fact, two weeks ago, we completed an exclusive Draganfly only capabilities day, organized by the Canadian Armed Forces or helped to be organized by the Canadian Armed Forces, which demonstrated the five vignettes or concepts of operation that they plan to put into immediate use, immediate being over the course of the next 18 months, using Category I and Category II drones. Within two weeks of that announcement, we were able to display successfully all five of those vignettes or concepts of operation, I would say flawlessly, and in an ice storm. That was four concepts of operation that we planned on displaying.

The fifth was an Arctic one, which we did not plan on displaying, but weather wasn't our friend that day, or maybe actually it was our friend, because we did move ahead with the capabilities day, regardless of the ice storm, and it went off very well. There's a lot of activity happening there. I'm meeting with government at all levels, including Senate hearings, and I think we're well positioned up there. We'll continue to pragmatically move forward with the Canadian government. We are gonna have to earn the business. Just because we're Canadian doesn't mean anybody gets it automatically, but it sure is a big advantage, and certainly I think we have the capabilities, and we're building that trust.

The other question is, why do we think we didn't make it past Gauntlet I in Drone Dominance, and do you think we'll reapply for Gauntlet II? Gauntlet I was an incredible experience for us. We actually didn't get notice that we were in Gauntlet I until 36 hours before, where most other companies had a couple of weeks to prepare for it. We did show up. We did perform quite well. There was one mission set that did involve live ordnance that because of the time frame, we couldn't perform. We think that's primarily the reason why we just didn't score on those particular points. We did score well on the other two categories. We think primarily that's why we didn't. We did learn a lot.

There's definitely some things we could have done better. We are very aggressive about Gauntlet II. We've seen the other capabilities out there. They're great companies. There's fantastic industrial capacity that's being built in the United States because of this incredible, unique, and brilliant format that they've put together. We can more than compete with anybody there. You'll see us in Gauntlet II, and we expect to be doing very, very well in it. Canada says they're really focusing on drones. Do you think that Draganfly is in a good position there? Well, I think I addressed that already, so I'll just move on. The answer is yeah. I think we're in a really good position there, but we're not taking anything for granted.

We'll continue to understand that we've got to earn that business, and it's a very discerning customer. There seems to be a lot more drone companies now than before. What are our competitive advantages to them? For sure, there's a lot more drone companies, and a lot more drone companies are gonna figure out that it takes a lot more than ordering parts off Amazon and putting a toy up in the air to actually be able to service a public safety, commercial, or a military client. You're fielding, you know, we're fielding aircraft here, highly regulated, incredible demands in terms of the expectation and the performance requirements to actually be a commercial public safety or military unit or military device.

As mentioned earlier in the presentation, it takes up to two years to actually put a real commercial military or public safety unit up in the air. While you know, you can kinda feel it's like snowboarding. You can get really good the first day, but you know, then you're gonna spend two years being able to actually you know become a decent snowboarder, if you will. I think you know and there's lots of great innovation out there. I do think that the more successful startups are probably likely acquisition targets for some of the more established public players out there. Our primary competitive advantage is the amount of time that we've been doing this and that we have a full product lineup that is completely integrated.

I would hazard to say that there's really only two companies in the world that have that, and that would be DJI, and the other would be Draganfly. We've been working on other product variants, or not product variants, product lines that come in and fill out that product line even more that you'll see come out this year. When we come out with a product line, you know, it's gone through the testing, it's been in customers' hands, and it's designed specifically for concepts of operations and missions that we were asked to build for. Because of that long-standing reputation, that capability, our infrastructure is built out. You know, the other thing a lot of these newer startups are gonna find out that it doesn't matter if you have the greatest whiz-bang.

If you can't build 10,000 of them in a month or 100,000 of them or have, like, some ridiculous demands that you can scale on, scaling a drone is a whole bunch different than building 10 that work really well. You know, you build 10,000 that work really well and have to have all the variants for the changes in potential operations. That in itself is an entire manufacturing process, an entire workflow that goes so far beyond, you know, the understanding of how to put one or two or 10 elegant machines together at, you know, at a low cost. I think access to capital right now seems quite liberal.

However, that is not going to be the case necessarily going forward as more and more winners are picked and customers become more and more discerning around, you know, knowing that they need to get a device and a company that they can rely on. I think we have a lot of competitive advantages. It doesn't mean that there's not gonna be great competitors out there. I've been watching these cycles for 25 years. Up until seven years ago, every North American drone company has gone out of business except for Draganfly. More competition doesn't scare us. I think a rising tide lifts all boats right now, and the more innovation, the better.

The fact of the matter is that there could be 10 Draganfly or Red Cat or Audaces or whoever out there, it still isn't gonna meet the demand that's coming down the pipe. The last thing we're worried about right now is competition. We kind of revel in it because we like to see the innovation, and it gives us a great insight into what might be coming as we're focused on other parts of scaling. The fifth question is, do you see yourself doing any acquisitions? Seems like lots of the other drone companies are. Yeah, for sure, we do. I think we are somewhat fundamentally different, though, we are pretty organically focused. We have great capability internally.

I think that we spend a lot of time refining our product with our customers. Not that others don't, but I do think the operational history pushes us that way a bit more. That's, you know. We're very focused in our acquisition strategy. We do have a number of acquisitions that are in the pipeline. However, they're not necessarily, not that they're not that they don't come with significant revenue. That's not the driving force for us. Fitting particular technologies that actually have a maturity of manufacturing in them or the design theory that's on them has a particular amount of experience that's been put into it that can allow it to be mass-produced and fit within all of our partners, multi-mission focused, et cetera.

Those are things that are really important to us. Yeah, you'll see us do some acquisitions. They will not come across, in my opinion, as haphazard at all. They would be very, very strategic. Again, we're playing, you know, for the next 25 years. We believe that Draganfly, you know, in 10 years from now, it for sure will be a drone company, but really drone companies will be super intelligence companies. Nothing collects data better than a drone. Nothing delivers anything better than a drone. When you combine those two things in an autonomous world, the possibilities of drones are far beyond what the device is. You know, we keep that end in mind when we're thinking about what Draganfly will become and where our real leverage is.

We tend to announce many partnerships and pilot projects. Are they translating into meaningful orders as your competitors? The answer is yeah, they are. But again, I believe that our approach is somewhat much more organic and blue ocean. If we think about the example I gave earlier around Cochise County, you know, that's been now a year-long project that's turning into revenue and has created a blue ocean opportunity for us around border management. We don't see anybody approaching drones as border management. Now, do we see people putting drones on borders? Yes. But do people have border management experience in terms of running, managing operations, designing, building, integrating information, super intelligence, autonomy, AI around a total solution that we can work with on our partners?

That's really the difference, and that's why I think maybe our partnerships are perceived to take a little bit longer. We can go by revenue, but then we gotta integrate revenue. You gotta write down, you know, all the costs around it. It just, I believe anyway, at least where our skill set lies, is our customer deserves better than us just jamming a bunch of stuff, you know, on the top line. We are very capital markets focused. Please don't misunderstand me. We are a employee first, customer second, shareholder third organization. You know, if our employees are really satisfied about what they're doing, they'll win customers. If we're winning customers, we'll win shareholders.

That's a philosophy that, you know, has allowed us to survive. Yeah, we've stayed small, but we survived for 27 years. Now we're really moving into a thrive mode. I don't think we'll be at any time soon be moving away from the core principles that have established us with some great product line and some fantastic people in the organization. Can you expand on your integration with Palladyne AI software stack and how it expands your total addressable market and potential new revenue. I think I addressed this a bit earlier, but the reality is, Palladyne's got a fantastic system, and their swarming technology is very advanced compared to many others that are new and coming out and etcetera out there.

We ourselves do have some of our own proprietary swarming capabilities. However, we do not wanna compete with what the customer wants. We don't want to tell the customer or have to convince the customer what they're looking for. Palladyne has got an incredible capability and a customer set that is really looking for their very specific capability. What we provide is a unique and really professional integration onto a, not just a drone, but a platform of drones that can now be utilized for all of that swarming technology. Imagine if you will, you build a swarming technology for an FPV drone. That's a pretty cool capability. Now imagine if you can build a swarming technology for a set of fixed wings, a heavy lift, a Commander 3XL that can drop FPVs.

You can have an APEX drone coming in and doing targeting acquisition. Your capabilities now are much more different than somebody who has a cool swarming technology on FPVs. Not that that's not important and impressive and all the rest of it, but again, it's really trying to hone in on what is it that the customer needs now and is going to need, and what are they learning that they actually need out there. I think that's what we're trying to address. While Palladyne is a really important customer and an exquisite builder of swarming technology, there are other swarming and AI-type technologies that will be incorporated into the platform. We want to be known as that platform that can do multi mission, right, and addresses many concepts of operation with as little cognitive load as possible.

You don't wanna have to relearn a drone system, have different parts, have different supply chain, all the rest of it. If we can incorporate, you know, all that complexity of logistics to the battlefield, right? People don't have to buy different drones to get different swarming capabilities as an example, or buy different drones to get different ISR capabilities. They can buy one system that can provide them likely the most fundamentally important thing, which is capacity, logistics, and supply, where it's needed, when it's needed. That's what we believe, and that's what our customers have told us that they believe is gonna be a winning combination. That was the end of the questions that Rolly forwarded off to me.

In closing, first and foremost, again, just, you know, blessings out to all the folks and the men and women who are fighting for our freedom today. Second of all, thank you very much to our shareholders. We absolutely wouldn't be here without you. Our customers, we appreciate the opportunity to be of service, and in particular, our employees, thanks for your belief in what we're all doing together. On that note, I hope you all have a blessed day.

All right. To respect everybody's time, I think we will get going right away. So again, greetings, and welcome to all the shareholders and stakeholders for joining us today for the Draganfly 2025 Q3 Earnings Call. My name is Rolly Bustos, and I am the Internal Investor Relations representative here at Draganfly. We appreciate you joining us. As always, we'll start with our CEO and President, Cameron Chell, recapping the third quarter earnings highlights. Next will be a more detailed financial review with our CFO, Paul Sun. We will conclude, as always, by addressing the pre-submitted questions we have received. You are welcome to reach out to me any time at [email protected], if you have further questions. I remind everyone that this presentation may include forward-looking information and statements. These statements are not guarantees of future performance or financial results and undue reliance should not be placed on them. Any future events or financial results may differ from what might be discussed here. The company's results and statements are accurate as of today, November 12, 2025. We're under no obligation to update or renew these statements outside of material press release disclosure going forward. The full forward-looking disclaimer can be found on the screen right now. So Cam, if you're ready, please go ahead.

Sounds great. Thanks, Rolly. Really appreciate that. And thank you, everybody, for taking the time to be with us today. We really deeply appreciate your time and consideration. So maybe just to hit the highlights out of the gate. So our revenue for Q3 2025 was $2.155 million, an increase of 14.4% year-over-year, that includes $1.6 million of product sales and about $530,000 of services. Our gross profit was $420,000, and our cash balance as of the September 30, 2025, was just underneath $70 million. So maybe just to run through a few of the highlights for the quarter. In particular, these are the ones that we felt were certainly material and meaningful to the shareholder and our future revenues. So first of all, we are unveiling the Outrider Southern Border drone, which is a Multi-Mission Drone in a Live Operation at Cochise County. So we -- basically, that whole operation is where we've got the Southern border sheriffs, basically commissioned by a heavy rider or what we call an Outrider drone, which is a drone that we designed with the Southern border sheriffs to be able to address the very specific mission sets that are required along the southern border. This very unique drone, which has a large addressable border opportunity globally, not just along the southern border, is actually a drone that really uniquely positions itself to be doing pretty much anything a fixed wing surveillance aircraft can do with the versatility of a Heavy Lift multi-rotor drone. And we'll talk a little bit more, and I know there's some Q&A that came in around that as well. So that was a very significant win for us. And in fact, on Monday of next week, we are actually doing the inaugural missions with that drone going live and operational, so we're really excited about the 100 or so different government and international representatives that will be there, witnessing and participating in those missions along the border in Arizona. So we also significantly bolstered our military and defense capabilities with the appointment of both Victor Meyers and Keith Kimmel, both are incredibly accomplished war fighters that bring very, very strong, both educational and operational backgrounds to the table. They are heading up our military Board of advisers. They're operational within the business and are supporting our sales teams as well as our operational teams. So we're super thrilled to have brought them on board, and they're very well-known certainly within the community. We were approached and very pleased to put a deal together with Paladin AI, and so we are actually collaborating on a specific opportunity that was brought to us from a military customer, but in addition to that, we are putting together and incorporating their AI into our drone fleet. We have several AIs that are being incorporated into our drone fleet. We treat our AI kind of similar to payloads. And what that means is that because our entire systems are modular, whether it's a particular type of camera, a particular type of payload, a particular type of sensor or even a particular type of AI, all of our system, right from hardware through the software, through design, is all managed in a way that can all be modular. So if we've got a customer that's coming to us that has a particular workflow requirement that requires a specific AI over another, we can incorporate that into it. Paladin has done some fantastic work in the industry, especially in forming. And so we're really, really excited about the opportunity that we've been able to put together, that they've been able to put together with us and vice versa. And so we expect big things out of this relationship, and it does start off with a specific customer that we are working with. We also announced that Drone Nerds, who is the largest reseller in the United States, has taken on the Draganfly line. In particular, for public safety, but also for military as well. So we spent probably a year working with them, really helping ensure that we are positioned well within the customer base that they're going to. They're a very discerning organization, and we really fit well within their NDAA-compliant strategy. And it should be noted, and I think I'm speaking with all accuracy here, is that in terms of a manufacturer, not just in North America, but a manufacturer anywhere in the world that has a comprehensive lineup of NDAA-compliant drones, I think we can point to Draganfly as the leader, if not really the only NDAA-compliant manufacturer out there that has 5-plus drone systems that are all NDAA compliant. And those range right from small FPV drones that we're selling into the military right through to the Outrider drone, which is a hybrid dual diesel engine, 7-hour, 100-pound capacity drone. So Drone Nerds has got this capability now to be able to offer that entire product line, in particular, down to their public safety. So we're really thrilled to be -- have been selected by them and get to work with them. We also had a fantastic show at AUSA. And this is really meaningful for us. So AUSA is the Army Association Show, basically the big military show in the United States. We were able to display there with our partner, which is the next highlight there, Global Ordinance. So Global Ordinance is one of the largest, what's known as DLA primes out there, one of the largest suppliers of munitions and equipment into Ukraine, as an example, amongst many other things, multibillion-dollar organization. And so they featured our drones along with them and have now brought us into multiple opportunities that we're working side-by-side on. So this show was really a coming out show for Draganfly in terms of our capabilities and capacities, and we had just an overwhelming response. Now this was also highlighted by the fact that we had a very significant announcement with the U.S. Army, which we'll talk about in just 1 second. We also announced that Autonomy Labs, which is a fantastic and strong U.K. company, basically decided to standardize on our platform being the Heavy Lift, which is not the hybrid version, but the actual electric version to be able to lay out their mine clearing, what they call, carpet. And so this is another great example, at least in my opinion, of payload companies who are looking to capitalize on the drone market, but are looking for the right manufacturer and the right solution provider to actually build their payloads around. So one of the key components of our modularity and our full product line is the fact that a payload is only going to be as successful as a drone platform as it can fly on. So our -- core strategy of ours is to be able to cater to those channel partners, those payload companies, again, whether they're things like LED signs that we've done before, or whether they're mine clearing carpets, or whether they're particular camera systems or AI systems, the more of those that we can integrate into our drones, the bigger channel that we have that those payload providers are actually selling into as well. And that is a -- it's a key component. So Draganfly having been in the business for 25-plus years now, we have that experience to be able to integrate all those other payloads into it. And it takes a long time to get enough integrations to build some critical mass around somebody -- an end user, a customer going, "Hey, wait a minute, I need to run this payload not just on a small ISR drone, but I also need to put it in conjunction with a medium lift logistics drone. And so for them to be able to make an investment once into a particular payload, but use it across multiple use cases because they've got different size of drones that those payloads can fit on to, we're finding that as a significant strategic differentiator or accommodator, if you will, for the customers that we're dealing with in the market and our payload providers. So again, thrilled to have done this project with Autonomy Labs. We displayed with them over at the DESI show in London, and they've really knocked it out of the park in terms of the amount of orders that they were lining up and the amount of testing that they've got going on with multiple militaries around the world. We also demonstrated both our Flex FPV and our Commander 3 XL platform at the invitation-only U.S. Army T-Rex experimental showcase. We were there actually, as I mentioned, by invite. We were demonstrating the 3XL and the FPV and how they can work in conjunction with each other. Again, if you think about that Commander 3 XL, which is above my left shoulder here, you really do notice that flat bottom on it because that gives a huge surface area for different payloads and multiple sensor capabilities. And so if you would also think about FPVs that are underneath that platform, and so you've got the 3XL, which can carry FPVs to a particular location, maybe a GPS denied location because the 3XL can handle the type of sophistication and radios required to be able to fly in those environments, and then be able to deploy FPVs from close range. The next notable one to bring up is that we have now -- we're well into working with standing up 7 new plants in the United States. through our contract manufacturing arrangement. We are in the midst of tooling those plants right now. That is going to more than quadruple our capacity. And for any of those that don't know that we currently in our own plants, we've got about $100 million of capacity that is now just kind of coming online. It took us until about Q3 to get that fully built out. We are now starting to produce on those particular lines, in particular, for the U.S. Army order that we announced about 4 weeks ago now. And so -- but these 7 new plants coming online, based on demand that we've got coming through, will give us somewhere in the range of about 4x that capacity by the end of next year. The company that we selected to go with, it was an arduous process, but the group that we selected to go with, their real speciality is -- I mean, they're great contract manufacturing. They were very accommodating about the tooling and the training that we need to provide, but they are very, very good on global logistics and supply chain management. And that's super key to us, in particular, because of the type of army orders that we're now entertaining. We're also, I believe, very uniquely positioned as an organization to support not just NATO, but in particular, the Canadian government. So Canada has now announced that 5% of their GDP is going to be moving towards defense spending. That's literally billions of dollars of new spending in this coming year. And there's upwards of $2 billion in the next couple of years spent just on drone technology. Now because of the unfortunate tariff war, which is working out fantastic for Draganfly between Canada and the United States, Canada has a very explicified Canadian policy right now. And given the fact that we have manufacturing plants and strong routes from Canada, we're very well positioned there, and have several initiatives ongoing in order to address that market and are likely -- there might be 2 companies in the whole country of Canada that can address that market for the Canadian D&D., and in fact, the other company right now only has one particular type of drone and it's more of a helicopter that would address that. So we think we're incredibly well positioned up there and thrilled to be able to be a service to that nation. Not only to the nation of Canada, but because of our Canadian manufacturing, our opportunities in the Arctic, both with U.S., NORAD, Canada and the Arctic states of Sweden, Denmark, et cetera, really seem to be also burgeoning quite well. So again, I would love to say that was part of our strategy. It wasn't. It's more luck than anything, but we're super proud to be in that position, and we look forward to servicing those organizations and customers over the coming years. And then we did have a Fortune 50 telecom company start to buy our Heavy Lift Drones. Now their Heavy Lift Drone in this particular case is being used for communication support on post-natural disaster. And we've been very, very hopeful with this particular Fortune 50 telecommunication company to actually expand the relationship. So this is part of 2 big initiatives that are happening. First of all, they're moving away from the Chinese manufacturing, and they were very explicit about needing a really solid long-term partner that had NDAA-compliant drones and had the capability to serve them at scale. So this was an initial order, but it was a really important order for us. And in the event that we see more orders from this particular company, we see it as a signal from them that they're standardizing on our fleet. And of course, those order sizes get well into the hundreds. And when I say hundreds, again, I'm not talking about a small ISR drone. I'm talking about a very sizable 9-foot drone that has incredible capabilities, is standing up cell towers, has tethered components to it and such. So -- and then, of course, a very notable subsequent event from Q3, which was incredible for us as a company and as shareholders was that we announced an order for our FPVs from the U.S. Army. Now this particular order, though we have to remain shy on some of the details of it, I can tell you that the reason that we won this order, I think, is -- I'd like to say it's because we have a terrific FPV platform that does have some incredibly unique features, designed from our experience being boots on the ground in the Ukraine since 2022, but I think the other reason that we frankly won this is that this particular order isn't just about providing drones, it's actually providing supply chain and logistical support. We're actually training this particular section of the Army to actually be assembling and manufacturing our drones so that they can do modifications on the fly. And then we're actually supporting that and providing the logistics for the resupply of all those drones into those locations. So it's actually Draganfly manufacturing on U.S. Army location and presumably, hopefully, locations. So really, really significant. It took about 1.5 years, maybe plus in order to actually put this order together. And it is one of the reasons that about 2 years ago, a little less than 2 years ago, I guess, about 18 months ago, excuse me, is why we still -- we started building out our capacity. So over the last 2 years, we basically had to cap our sales. We had to rebuild a bunch of our capacity in order to meet the demand of this and the other particular similar orders that we anticipate coming down from this. So just a quick review. This is our drone platform. This view here does not include the Outrider drone, which actually goes live next Monday on the Arizona border. And that drone itself would look very similar to the drone that's on the far right side, the Heavy Lift Drone, other than the fact that it has combustion engines on it as well. It can come with a variant of either 1 or 2 engines. It has the capability to fly up to 7 hours and carry 100 pounds of payload. That particular drone will be doing everything from communications, mesh networking, surveillance, reconnaissance, actual interdiction, logistical resupply, medical emergency support and many, many other things. I mean it is truly a drone that fits just an incredible array of use cases. So the event next Monday has over 100 people coming from multiple countries, all pretty border-focused. And the word that we're getting now is that we called this drone the outrider, but most people are calling it the border drone now because it's a purpose-built border drone. The TAM on border and border surveillance for drones is literally globally in the hundreds of millions of dollars per year for this particular product line. So we have some pretty high hopes and certainly, early indications are that this is going to be a leading driver of sales for us, even next year, even though we hadn't planned on it being a big driver of sales until 2027. You can see the other drone line up there, which I think I've explained pretty well in past calls. The key thing here is that they're all interoperable, all the payloads fit across it. If we've done an integration on one drone, whether it's with an AI and yes, our Flex, even the FPV drone there has AI incorporated into it, whether we do it with that drone or all the way up to the Heavy Lift Drone or the commander -- excuse me, the Outrider drone, you're working with the same common operating environment, the same connections, the same buttons in the same places, flight characteristics and so on and so forth. So it's also of note that the old DGI payloads that were supported by DGI, also fit into this modularity. So if somebody's got an investment into a payload, they got FLIR cameras, or they got whatever it is, and they're having to get rid of their DGI fleet, but they do not want to lose their investment into their FLIR cameras or their other payloads, those payloads actually integrate right into what we're doing as well. So again, it's just some experience there that's helped us think through how do we progress our customers into a new full product line. I won't spend much time here. But basically, the military impact for what's happening in the small UAV market is incredible. We recently saw in the last couple of weeks, the U.S. government talking about getting well over 1 million drones. And I know one of the questions that came in is, do we think we're going to get our piece of that. And certainly, that's what we've been planning on for years and working toward, and we are one of the few companies in North America that have that capability or capacity to be able to meet that demand. So we're pretty excited about what's happening there. We do have some validation around the Army orders that we previously sold in Special Forces and now into the Army as well as the many other initiatives that we've got going on across the whole Department of War. At this point, what I'd like to do is, I'd like to turn it over to Paul Sun, our CFO, to run through our financial highlights. Paul?

Yes. Thanks, Cam. Thanks, everyone, for joining. Appreciate it. Yes, just taking you through these tables here. Revenue for the third quarter was $2.16 million, up 14.4% from $1.89 million in the third quarter of 2024. Third quarter revenue did comprise of the $1.62 million from product sales with the balance coming from drone services that Cam mentioned at the outset. Gross profit, $421,000 this quarter compared to $441,000 in Q3 of last year. This quarter did have a onetime noncash write-down of inventory of $43,000. And otherwise, gross profit would have been $464,000 gross profit for Q3 of 2024 would have been $617,000 if we took away the onetime inventory write-down of $176,000 from the same period last year. So taking these noncash items into account, gross margin would have been 21.5% this quarter versus 32.7% year-over-year. Total comprehensive loss for the quarter was $5.4 million, compared to a loss of $364,000 in the same quarter last year. This quarter did include noncash changes comprised of a fair value of derivative liability loss of $1.8 million, that $43,000 inventory write-down that I mentioned and a gain on a notes receivable of $35,000. So otherwise, it would have been a comprehensive loss of $3.6 million. The same period last time had a onetime noncash change in derivative liability of $3.6 million. The $176,000 inventory write-down that I mentioned, and then a gain on an impairment note of $8,000. So the comprehensive loss from last year would have been $3.8 million. So the decrease in loss is due to primarily foreign exchange gain and lower professional fees, offset by higher office and miscellaneous costs, wage costs and share-based payments. If we move to the next slide, please. Yes, we just went through the year-over-year changes. So here, I'll do a quarter-over-quarter between Q3 of this year and Q2 of this year. Revenue for Q3 '25 increased $41,000 to $2.16 million, up from the $2.12 million in Q2 of '25, an increase of 2% due to higher product sales. The gross margin for Q3 '25, again, was 19.5% compared to 23.9% for Q2 '25. Again, if we back out that onetime inventory write-down mentioned before for Q3, and the $10,000 write-down from Q2 '25, gross margin, again, would have been 21.5% for Q3 and 24.3% for Q2, with the difference being product mix during the quarters. Total comprehensive loss for Q3, again, was $5.4 million compared to $4.7 million for Q2 of '25. And again, please recall, we had that loss in fair value of derivative liability of the $1.8 million, the write-down of inventory of $43,000, and the gain on the note of $35,000, so the comprehensive loss would have been $3.6 million. If we adjust for the noncash items in Q2, which included a noncash gain of a derivative liability of $180,000, a write-down of $10,000 of inventory, and a gain on a note of $8,000 that loss would have been $4.6 million. So the quarter-over-quarter decrease in loss is primarily due to the foreign exchange gain and lower professional fees, offset by wage costs and share-based payments. Going to the next slide, please. Yes, so just kind of looking at some high-level balance sheet items here. You can see total assets increased from the $10.2 million at the end of '24 to $77 million, which is largely due to the increase in cash over the year. Working capital as at the end of September was $69 million versus $3.8 million at the end of December. However, if we ex out the fair value of derivative liability of $3 million, working capital would have been a surplus of $73 million this quarter and $6 million at the end of December last year. Doing the same analysis for the shareholders' equity at this quarter end would be $73 million versus the $70 million shown and $6.8 million at the end of December versus the $4.6 million shown here. And as you can see, we continue to have minimal debt. And our company's cash balance, as Cam mentioned at the outset, was $69.9 million at the end of September, compared to $6.3 million at the end of December. And with that, I'll pass it back to you, Cam.

Great. Thanks, Paul. So what I'll do now, if it's all right with everybody, is I'll jump into some of the questions. There's 9 questions that came in. I'll certainly do my best to be timely and answer them as thoroughly as is reasonably and regulatorily possible. So the first one that we've got here is it says you seem to have more cash on hand now than ever, what are the scenarios or use cases for any potential future raise? So we'll be opportunistic about potential future raises. We -- I think, we've raised less cash certainly than our comparables out there, and we're cognizant of cash being a strategic advantage. That said, we're highly, highly sensitive to dilution and shareholder value. So basically, we've got $70 million cash on hand. We're burning about $1.5 million a month. Things are scaling in a great way. Pipelines are -- literally, I can't even say the numbers because they're really truly unbelievable. So there's not an acute need to raise cash. And we certainly, as a company that's been around for 27 years, we're able to -- we think we have very good visibility to EBITDA positive and cash flow positive over some time here. That said, there are some key acquisitions that we're interested in. They are, to be clear, not necessarily acquisitions around technology or a particular product. Our acquisitions, which I think is a bit different than our comps out there are very focused on the people. So -- we have the -- we're in a fortunate position to be able to build what we sell and integrate what we sell. We're highly engineering-focused and customer integration organization. So what's most important to us is having the right team and people to be able to do that. So there are some pretty cool acquisitions out there that do have some great products and tech that fit with what we're doing, but they're probably not at the size or scale that maybe we see some of the comps out there doing because really what we're interested in is culture and how those people fit in, how we better serve our customers, how that can scale, how that can add to the scalability of what our customers are asking for us right now because the scalability that's being asked of us is truly astronomical. So us is not about layering in more acquisitions, which can sometimes be more problems. We're really about layering in the right personalities, people and leadership and technical capability in order to meet the demand that's at hand right now. And of course, those customers who are making those demands and they -- and that's kind of really where the market is at right now, we want them to be incredibly confident with the people that we're bringing on. So that tends to be a bit of our acquisition focus, which I think is probably another one of the questions in here. So in terms of raises, if we needed to do a raise for an acquisition, we would consider that. If it was opportunistic in the market, everybody says when the cash is there and you're in growth phase, you kind of really want to make sure that you do not take it. But we're going to be -- we're definitely going to be prudent about that to the best of our ability. So the second question that came in is, can you expand on the press release about manufacturing and overseas military facilities? How large is the potential here in terms of revenue? Are the financial metrics of this much different than manufacturing is done in North America, and then shipped as a final product? So I'll speak to the extent that I can about this. So the manufacturing in overseas facilities is very specifically in military facilities where they're manufacturing a Draganfly product. And it's a little bit more of assembly than manufacturing. The prime driver here is that those facilities need to be able to modify and have capabilities that they don't need to go back through a procurement cycle in order to order some new capability on a drone. They need to be able to do those modifications and such themselves. So they need to be trained in how to manufacture, how to modify, how to repair, how to change the product within the concept of operations that might be changing in their tactical situation at that time. And so that's really the driving premise. And then the other part of that is, is an Army base ever going to be able to do that on scale? If you think about what's happening in places like the Ukraine right now, you have individual brigades that are using hundreds of thousands of drones per month. And so you're not going to get that kind of scale on an army base. So you need a partner that can actually still provide that scale into your theater of operations while you still have the capability to actually make the modifications or drive your technology or tactics forward. And so that's more of the type of relationship that's here, which is why it is so strategic and such a big deal. In terms of scale, all I can say is that there's a lot of brigades in the U.S. Department of War and in all the NATO and the 5 I countries. And when I was at AUSA, one of the big announcements from the Army was that every soldier is going to be trained on a drone, every single soldier. And the reason is that if you think about those FPVs right now, which are not -- they're just the tip of the iceberg of what's coming, and they tend to be the focus right now. But basically, every soldier has a grenade that can go 10 kilometers. Now that's -- I mean that's what they choose to use it for. So the scale is absolutely enormous. But then when you also look at what's happening on the logistics side, on the resupply side and all the rest of it, and they need that embedded manufacturing capability, which is what we're calling it a hybrid embedded manufacturing, I really am not at liberty to say what the sizes are, but you can figure out pretty quick that it's numbers that are just completely astronomical. So the U.S. has stated that they intend to order millions of drones. Do you think we'll be able to get a meaningful piece of that? I do. And it doesn't have to be a big percentage of it for it to be meaningful. And the ethos that Draganfly is, we want to make sure that every one of our customers, whether they're military, industrial, commercial, whatever the case is, our job is to help ensure that our customer is unbeatable, absolutely uncompetable. And so again, whether that's a military or an industrial customer, what we like to do is add value. So will we eventually be the biggest drone manufacturer in the world or something? I don't know, and that's actually not our goal. We want to be the best partner to our customers that make them uncompetable. So we really want to continue to be that high-value, highly sought-after organization that brings a lot of experience and a lot of consciousness to the table in terms of the products and the services that we're able to enable our customers with. So the short answer is, yes, I think we can get a piece of it, and we'll just keep working to do so. Canada has said that they want to purchase Canadian-made drones. Can we expect meaningful orders from Canada and the Department of Defense at some point? I believe so. I can't give you predictability or any deeper insight, but I think we are as well positioned by far as anybody in the world to be able to provide that very big budget. We don't often think of Canada as a military force. That said, it's about the seventh-largest economy in the world, and now you get 5% of that economy going into rearming and reimagining what they're doing. And a very meaningful part of that is going into drone technologies as is all military budgets now because we've moved from into an entire new phase, where everything is actually becoming about -- not just about automation, but about autonomy. And the leading edge of autonomy is, quite frankly, drones, whether it's controlling autonomy, being autonomous, being in airspace, managing aerospace, all of it, drones are the leading edge of that. And so even small military budgets now are meaningful because so much of that budget is being focused into this particular area. So is border security still the main focus for the company? Yes. I mean, if Cochise County and the Southern Sheriffs is any indication of where we've been fortunate enough, very blessed to be able to be positioning ourselves as a border management specialist, not just with our drones, but with our tactical solutions team to be able to understand the ConOps and integrate the understanding of the ConOps into functional equipment, yes, border management, border security is a huge, huge piece of what we're doing. And I do find that we're pretty uniquely positioned there because it is a particular specialty that isn't just about ISR. When you've got folks coming over that border, you've got search and rescue situations, you've got human trafficking, you've got weapons, you've got armed militias, you've got drugs coming in. So the variance of what's happening is so incredible that you need to have a specialized team that really understands how to work with our -- with the law enforcement professionals and the super great people along the border that are holding our economy and our people safe in order to be able to provide that service. So again, those tactical solutions that we provide, the integrated services that we have at a tactical level are really our strategic differentiator for building great product. Do we see consolidation with the drone industry? For sure. Yes, there's -- I think we're going to continue to see a great expansion. A lot of small companies, they're talking about 1 million drones. They're talking about easing procurement. They're talking, what's going to -- like -- this is not an easy business. You're talking about putting aircraft in the air. And so any way you slice it, a lot of people can order parts off Amazon and think they can build a drone. But when you're talking about building drones at these levels, with these mission-critical requirements and/or flying them over people or vehicles or that type of stuff, I mean, you're just dealing in an environment that most people do not understand. Then on top of that, trying to scale production, that's a whole other set of problems out there. So we think there's going to be a big rush of folks. There is a big rush of folks into the industry. We've seen it 7 or 8 times before over the last 25-plus years. There's going to be fallout from it, and there's going to be great talent available out there, and we're hopeful to pick up some of that talent because there are super talented people in lots of organizations that are working on these problems, including our comps out there. I think our comps are probably obvious names, they're going to do great. There's kind of like the 4 or 5 companies out there that have kind of made it through some very lean times, have some capacity capability now, have some experience. And they've got enough scars like we all have enough scars where we're going to muddle our way through and be able to solve these solutions or solve these problems at scale. And so I think the industry in general is starting to shape up quite nicely. There's also a couple of privates that will do well. But yes, there's going to be consolidation for sure as there always is. So can you give us an update on what your production capacity is and if you had planned to increase in 2026? Yes. So our #1 focus is our organic capacity, which is -- can do up to about $100 million. And that's what we really want to make sure that we're streaming that in '26. And then -- but we are bringing on more capacity in '26, and so it will expand far beyond that, but our focus is on our organic capability. We -- part of the reason that we've got outsourcing capability that we're bringing on stream is for some of our supply chain management and being able to provide from different parts of the countries and different parts of the borders to ensure that we've got efficiency around tariffs, efficiency around manufacturing, delivery, supply chain, et cetera. So again, pretty unique positioning in terms of North American manufacturing and being able to suffice all parts of North American and European, in particular, manufacturing. So again, it wasn't part of the master plan, but it sure worked out well for us. And it was maybe a little part of the master plan, but not all that much. So can you tell us what percentage of revenues would be military versus commercial? Do you expect military to be a major part of your revenue going forward? Yes. Right now, it's -- I'm going to say we've had our revenue capped here for the last couple of years, and that's certainly now about to change very quickly or is changing very quickly. And I would say that military is, let's call it, 30-ish percent of that. But that will be -- next year, it will be 90% just one single order dwarfs the numbers that we've done for the last 3 years. And there's multiple types of those orders that are falling into place. So it could be 99%. We could see our commercial or our public safety market go up 200% this year. And military sales will still be 90% just because the individual order sizes, and then the resupply and everything else is just so absolutely mind-boggling. So what do you feel differentiates Draganfly? Our integrated practices, our integrated tactical services. That is a big differentiator for us. So when we worked on the Cochise product, we spent months on the border on horseback, on ATV. We understand the communication points where the holes were. We got to learn where the cartels were, how they think, what they operate, what are their techniques, like all of that stuff. And then we sat with the sheriffs of the southern border, and we spent the time designing what is the capabilities that they need to meet. So whether that was that instance, whether it's some of our industrial clients, whether it was the opportunity that we created over the last -- was provided to us, excuse me, over the last 2 years with this latest Army contract, it was that same process. It didn't start with the product. It started with understanding the concept of operations, the use cases, and then -- and really kind of figuring out, okay, what can make your situation such that we can help make you uncompetable. And I think that's our differentiator. Now further to that, we've got 25 years of experience that allows us to have a full product line. So we can actually leverage that and be able to provide those types of products out there and services. So at the end of the day, it's our people. And I hate saying that because it sounds like such a typical answer, but that is how we utilize the incredible talent that we've got in the company in order for us to be differentiated. I do think the fact that we've got manufacturing not just like on 2 -- across 2 borders is a big differentiator as well because that Canadian market has turned into a monster opportunity. And so that's pretty unique as well. So -- and I think ultimately, what will carve out a durable market share for us over the next 3 years, from a strategic standpoint, we're all about creating blue ocean opportunities. So there are a number of companies, and there's a whole bunch more coming that are going after that kind of Mavic 3 replacement, small ISR drone, which is a lucrative market right now. But ultimately, that market, in our opinion, what we've seen over the years is that's a market that's going to continue to get chipped away at. There's multiple players going after it. Right now, they're $30,000. A year from now, there'll be $20,000. 18 months from now, they're going to be $4,000 drones again. And maybe the comps out there aren't going to agree with me on that. And then the risk is actually -- there are -- everybody thinks that DGI came in and dominated the market. Well, we have to remember that the North American market was being dominated by multiple foreign manufacturers, primarily out of Asia. And if it wasn't DGI, it was going to be one of them that basically took the rest of us out in North America. It's just that DGI was so good. They were able to dominate those players as well. Well, a lot of those players were from countries that can produce NDAA-compliant products. So if I were to make a prediction, in a number of years from now, we're going to see the Eastern Europeans, we're going to see the Southeast Asians, we're going to see them in that kind of small competitive ISR prosumer space, again, with NDAA product. Now we got kind of like a 3- to 5-year kind of window here where that isn't going to be the case, but it's also not been a reason where we've really kind of focused on that particular product line. If you look at the rest of the other 5 products that we've got, they kind of skip over that piece. Now we've got some strategic alliances and such in that area so that we can address it with our customers, but that's just not a piece of the market that we've seen North American manufacturers be overly successful with. Now the market is very different, and I could be completely wrong on it. But notwithstanding, when we take on a market like the border, we're building a border solution, and we think that we've created a very unique scenario where we've got an addressable TAM where it's going to be very tough for other folks to compete in there because of the job that we do, making our customers so uncompetable. And so whether it's that particular product or the embedded hybrid manufacturing product or any number of the others that we either have and/or will be announcing, we like to create blue ocean opportunities. So we've got these pockets or hides of burgeoning high-margin business that are very attuned and custom and ideal for the products that we make. And that's a multibillion-dollar sales funnel, certainly over the coming years. And so we don't necessarily have to be, hey, let's go build a typical drone and have to be the #1 or the #2 player. We're -- even though we're a small company right now, we are the #1 or #2 player in the markets that we are addressing, and they are large total addressable markets. So on that note, I am going to wrap up the call. Rolly, thank you so much for all the work that you do. I know that I get so much feedback from shareholders about how candid you are, how hard you work, you're 24/7. And I encourage anybody that if you've got questions or anything that you need help with to reach out to Rolly. He also has the rest of the organization standing behind him in order to be of greatest service that we can be to our shareholders, all of which none of this would be possible. And then finally, just to our team members and to our employees, you're the most important thing that we have going out there. And that ethos of helping make our customers completely uncompetable is the ethos that keeps -- certainly keeps my passion going, and I see you guys executing that every single day with customers in ways just going deeper for them than I've seen across many, many organizations I've been lucky enough to be a part of over the last 35, 40 years of entrepreneurship. So I couldn't be more proud. Thank you so much, everybody, for being here and reach out if you have any questions.

Thanks, everybody.