Draganfly Inc. (DPRO) Q2 2022 Earnings Report, Transcript and Summary

Thanks, Rolly, and thanks, everyone, for joining us today. Thanks in particular to the incredible team that we have at Draganfly and for the work that you have done in this last quarter, especially thank you to our shareholders, stakeholders who have had trust with us, believe in us and are on this journey to create the number one or the number two drone solutions company in North America. Not to take away the good news from Paul Sun as he reveals the and runs through the financials. But we're very happy as a team to report that we have had another record quarter. I think this is probably about #5 in a row. And we continue to see growth in the manner that we really like to see growth. So we are -- and we did complete and we're reporting $2.37 million of revenue in Q2. This represents a 19.6%, almost 20% increase year-over-year. And most importantly, that is 100% organic growth. That's customers that are coming to Draganfly for the products and services that we are designing and scaling out for them. And that is really at the core of our strategy is that the IP and the solutions that we design are the core solutions that our customers are wanting and that we're growing that base. That's what we believe will create long-term sustainability in the business. I'll let Paul run through the details of that. And after the presentation, we also look forward to answering the questions that you've sent in ahead of time. I'm just going to pull up a share here. So we've got the customary disclaimer. And of course, Rolly gave us all notice of the potential forward-looking statements. So just to be clear, and it's really important as we put our financials in context where we strategically believe the industry is and why we are conducting our strategy in the way that we're conducting our strategy, which is somewhat different than maybe some other drone competitors out there, the routes that they're pursuing. So first of all, the industry today is about a $20 billion industry. And now the industry is primarily, and it's really important to understand this, is primarily military, it's probably about 95% military, a couple of -- 3% - 4% of consumer and really only 1% or 2% is commercial. And listen, I've seen these industry projections for years where they say, hey, it's going to grow to $40 billion like this projection does, and I've never believed them. And the reason I've never believed these before is because we are one of the companies that were around working in the commercial space in particular, and we weren't seeing that kind of growth. We were having to fight for every single sale, every single deployment, every single service ticket, whatever it took -- now what we've seen since the FAA has started to give a particular guidance around loss, but other regulations as well is that we have seen the industry open up. And we -- and our issue right now is managing how we grow and the type of growth that we want to have, not fighting for those sales. So we do see, and for the first time, believe these industry projections of going to $40 billion or having the potential to go to $40 billion by 2028. The constraining item there is not demand, which is really exciting. The constraining item there is infrastructure capacity, regulation, the ability -- supply chain, the things to keep up to the demand. But it's important to note that because when you take that longer-term view, right, you end up designing and building services and products that are proprietary to you, right, is solutions that are proprietary to you so that you cannot just make the sales now, but really create a moat around your strategic differentiators and the services that you'll be providing in the future. So the industry today still is highly fragmented. The commercial market, in particular, is at an inflection point, where it is where the majority of the growth is going to be happening. Things like AI, autonomy and the sensors are more important than ever. And the things like we have very large segments coming into this now like delivery, like services that are big, big needle-moving opportunities. They're not a matter of selling $100,000 or $230,000 or $50,000 drone units. They're multimillion, multiyear opportunities. And those are the majority of the types of contracts that we are now working on. So our business model just for review, and again, just to put our financials in context, really has 4 broad sections. We do contract engineering, and it's one of the reasons that we've been around so long is that we have done a lot of contract engineering in particular to the military contractors, the aero environments of the world, as an example, or the Raytheon type companies. And that contract engineering over the last 24 years has allowed us to build a really strong bench of engineers. So while pretty much every other North American drone manufacturer has gone out of business in the last 20 years, right, not in the last 2 or 3 or 4 years since we've seen a number of upstarts start. And I'm talking about the last 20 -- almost 25 years where they've all gone out of business, and they all had hundreds of millions of dollars behind them is because they basically tried to build a commercial product, sell it into a consumer base, had no margin and had to compete with Chinese or offshore type manufacturers. The market is very different today. And one of the reasons that we're able to really garner the market and be in a position to take advantage of the explosive growth that's about to unfold is the fact that we have such a strong engineering bench that has been building military applications for over 20 years now. So we also have a full product and development sales pipeline and lineup of products. So it's not like we're, hey, we're coming out with a new product and we're going to get into a new industry, and it's going to develop and we're going to get a signature customer. We've been developing new products for years. And just this last quarter and some of the operational highlights that we'll talk about is we just released 3 really exciting new projects -- products, which are absolutely going to be driving our growth through Q3, Q4 and beyond into next year. More on that in a minute. But the point is we have a product line that's built out. It's not like something like, hey, we're trying to get that first customer or that first -- this thing -- is scaling. And the scaling that we're doing right now, constraints are all around our ability to continue to increase our capacity, which we're doing as fast as we can. We also have full flight services. And a lot of companies have divided themselves either into a manufacturer or into a service company. And the reason that we do both is because companies aren't coming to us looking for a drone that goes 5 minutes further or 500 feet higher. They're coming to us looking for solutions. They're coming to us to might be port authority. And they're saying, we need to do environmental monitoring, we need to do security. We need to do mapping and survey and we need to have it in a comprehensive package that feeds into our ERP or into our IT. So again, it's -- at that point, it's not really a matter of which is the right drone. The question is, which is the right platform. And at Draganfly, that's what we continue to build is platforms for our customers in these segmented industries. And so we do mapping, we do survey, we do data collection and we do delivery as services, many of which we'll talk about in some of our operational highlights coming up here. Now the other area that's really important to us is our software data and AI. At the end of the day, the customers, again, aren't looking for a particular airframe. They're looking for a platform, but what they want at the end of that platform is a result. And the result is a package delivered or the data that comes from the mapping in the survey or the mining survey or the mine detection survey, they want the data, even as it relates to delivery, the data is so important that when it was delivered, how it was delivered, what was the package weight, what was in the package being delivered, how long before they picked up. This is all incredibly important competitive intel. So we're highly focused on our own kind of AWS services, if you will, where we actually fly flight services, design specialized sensors, have some of our own proprietary sensors and AI that provides data back to our customers that they can't get anywhere else, much less from another company that might manufacture a drone. This is our long-term strategic objective. 5 years from now, Draganfly, of course, will be known as a drone company. But we're likely, in my opinion, going to be probably the largest data repository of forestry information in North America, maybe the largest repository of certain types of mining deposits in North America. And that's the data that becomes really valuable to our customers and so sticky. But that data is the most important asset of the company. And so they're not looking to get John and Jerry's flight service company to fly a mission, not looking for a particular drone to fly that mission. There are -- provide them a and reliable -- feel that we can say this with such confidence is that we've seen the market develop over 24 years. We've seen all the big competitors come in with the big private equity names and the big capital and the amazing management teams that they are -- and a lot of them just -- they just haven't seen all these cycles that they think are new are just the same thing repeating themselves. At the end of the day, the drone industry really is about the data chemistry. So our full product and services here, you get a sense of it. We've got our Draganfly Commander, which has been an award-winning drone for years. We've launched our new medical response drone back in Q1. We actually delivered those -- started delivering those into Ukraine, an incredibly capable drone totally unique in the industry, temperature managed box on top, again, it's a solution. And it's -- there's lots of drones or airframes you could put into that theater but there are not a lot of growing solutions that can provide the delivery of insulin or antibiotics or emergency medical equipment in a combat zone, that's the -- for humanitarian reasons, and that's the exact type of solution that's gratings traction with customers over in that region. Now we have search and rescue drones that are highly specialized, we've got fixed wing drones that are highly specialized. We work with the Draganfly Quantix, which is actually an aero environment product that we've done a bunch of work with that we've modified and worked with for agriculture and for situational awareness or reconnaissance, but we're not afraid to use other platforms that are best suited for our customers. We have our long-range LiDAR, which we'll talk about a little bit more in our Commander 3 XL, which we'll talk about shortly. We have full flight services. And in each one of these areas that you see listed here, we have something that is a strategic differentiator, something that is completely proprietary to what we do that differentiates us from somebody else that might be able to fly a mine detection mission or a mining mission or power line missions. The reason that we developed our own LiDAR system is for that exact reason. There are certain types of measurements and data that we can collect and apply AI to that other companies can't do that allow us to have a differentiator with our customers and provide them better data, which speaks to the final piece of the equation here, which is our AI and data solutions. We're the only folks out there that actually have a camera system that can record things like vital signs, your heart rate, your respiratory rate, your blood pressure. Now if you think about how important that was during COVID, now apply that into search and rescue, right, apply that into combat situations, apply that into surveillance situations in combat areas. We're even doing work with and wildlife reserves and organizations around the world so that they can take the vital signs of animals and livestock without having to sedate them or to put humans in danger and/or to collect multiple amounts of data at once as opposed to just sample data. So it just becomes endless when you start to have your own proprietary solutions. I'm going to turn this slide over to our Lead Director, Scott Larson to talk about what our growth strategy is because it's a really important component of what we're doing, and it's a very, very disciplined approach. Scott?

Yes. Thanks, Cam. When we look at our strategy, we kind of break it up into 2 different categories. One would be organic. And so revenue, as Cam mentioned earlier, and Paul, our CFO, is going to get into here in just a few minutes. We continue to grow at 15%, 20%, 25% year-over-year. In fact, as Cam mentioned, it's been more than a few quarters where it's had that type of growth right way. So it is just organic growth that comes through new product development, engineering work, entering into new verticals with some of the new tech that we're coming out and then designing joint ventures with other participants in each one of those verticals. The second way is designed to move the needle a little bit more -- a little bit further and a little bit faster, and that would be through larger partnerships, looking at different entities in different verticals. Maybe we'll come back and talk about that in a couple of minutes, looking at larger technical solutions and software and going into things like Ukraine that Cam talked about and bringing in some new products into that. And then looking essentially through larger joint ventures, engineering kind of work with other industry leaders. And we think that there are a number of those initiatives that we're working on for the last 5 or 6 months. These are longer-term long sales lead items that just take a lot of effort to move through the pipe. But broadly, our growth strategy here at Draganfly is to keep getting the singles and the doubles, if you will, keep growing at the 50% to 20%, keep growing kind of the core of the business that is the foundation of the type of work we've been doing for the last -- since the company started in the late '90s. And then secondly, look to layer things on top of that, that really have the ability to take Draganfly to different levels, different sectors, different countries as well. And so those are the 2 different things that together kind of make up the high-level strategy and the path that we're on.

Yes. And I think that there certainly seems to be plenty of M&A opportunity out there, but we're really selective around that. And I think Scott has done a great job of characterizing this as growth through partnerships. With the valuations in the industry not being where they could be or where we potentially believe they will be, we're very, very fortunate to be in a position to rely on organic growth. So that's the growth that we want to focus on and demonstrate to. And much of that has been, as Scott likes you put it, singles and doubles that we have been hitting and continuously hitting and -- to do that because we've been building up our capacity. Now there are a number of real what we call needle-moving opportunities that we're well down the path of. And some of those we'll be able to talk more about as the quarters unfold. And I think some of the work that we've been doing in different parts of the world represent those very large opportunities for us. But we -- but both feet on the ground is really important that we feel it's really important that we demonstrate good product development, good customer growth, good credible customers Q-over-Q. That's where we believe that there is sustainability. The M&A is great. Integrations are tricky as we all know. And silos of M&A isn't going to necessarily build something that's a sustainable platform. That said, we've got some interesting conversations going on, and we look forward to making some of those right moves -- so just to hit some operational highlights from the last quarter. I think this last quarter really for us could -- despite our record revenue of this last quarter, we were really focused the last number of quarters, and we started to see some of the results of it in this last quarter in terms of product. So we don't go out and build anything that isn't being demanded by customers, right, that we haven't been doing everything from AV testing to working directly with customers knowing that we've got sales for the products that we are building out. So in this last quarter, we released 3 new products. We released the Draganfly heavy lift drone. Keep in mind, in Q1, we also released a brand-new product, the Draganfly medical response drone. So the heavy lift drone is a versatile industry, multi-rotor, unmanned aerial vehicle that can be flown autonomously or manually or semi-autonomously -- it has a capacity of 67 pounds, which as you can see by the size of the box there is massive. I see a lot of these other 0.25 million dollar drones out there and they're bragging about capacities of 20 pounds in their VTOLs and they're big fixed wings, and I'm just like, I don't understand the economics of some of those. Not that they don't exist and I'm not disparaging them, but this thing is a real powerhouse. And I really want to throw it to our engineering team. I mean, they pushed back on me for a couple of quarters having this thing released, and I was like, I get it out there. I mean the market is hot for this type of product, whether it's an industrial lift type of situation or whether it's a delivery situation, whether that's going to be by a fixed routes or by specific situations that are needed to deliver something of about a 70-pound capacity. But we've seen incredible demand from this product. Q3 and Q4, in my mind, this is just my opinion, is like we have better visibility in our numbers now than we ever -- had our old existing line and our services, but we've got these new products now that are coming in market that are tested by customers. We've got demand. We've got orders, we're really able to start to see that Q3, Q4 and Q1 visibility. And it's being driven by products like this. But I'll caveat that by saying that we're not a products-driven company. We're a platform, and we're a solutions-driven company. So each one of these things, while it's designed and is being sold as an individual product really fits into a bigger solution. So if we think of our overall agricultural strategy, we think overall, our delivery strategy, if we think overall of our mapping and survey strategy and how these payloads fit together on why we're building these drones in these orders, it's because we know that we've got solutions and -- not necessarily these products, right? Products are great, but you sell them and then you got to sell them again. When you sell an entire solution to a company and you're servicing long-term multiyear contracts, but you can do it because you have a strategic differentiator that's built into your sensors and into your -- there great products, they're world-class actually fit a much bigger solution for our customers that moving what we call opportunities, multiple opportunities that are coming. So the second product that we've released here was the Commander 3 XL. Now this is the smallest drone that we have produced that would be sold kind of as a product. Now we have produced extremely small drones, but those were specialized orders for specialized customers. This is something that's really of the typical drone size that you see this out -- we refer to it as a Switchblade drones. This is something that can fit multiple payloads. It is incredibly strong. This thing can lift over 23 pounds, and it is a small drone, right? So if you think about needing to drop things like chainsaws into fire areas or being able to carry payloads into service areas or being able to utilize quite large sensors for missions that were typically referred to kind of like $50,000 and $60,000 drones. This little unit is able to do it. It breaks down and fits into a package about this big. Those are -- playing a utilitarian here for a very good reason. And anyway, the initial product orders coming in this are looking really strong. The testing that we're coming back, the feedback that we're getting is just like finally is something that's like this takes no brains to run, its brain damage-less, that load your payloads and it works, and it works every single time. It's multiweather top end as well. So we're really excited about the utility of this particular product. And again, we've never really built a product that's down in this price zone before but -- we just couldn't help ourselves. We definitely have used in a commercial. Now the other product that is the actual long-range LiDAR. So again, think about the they're building airframes. We're building airframes that are part of the solution and part of that solution is the actual sensor. So what you'll see -- is got generally U.S.-made LiDARs and some European LIDAR systems and have a price point and a quality that's very high. And then you have a Chinese line coming in, and in some cases, even better but not necessarily overall, but the price difference is just amazing. Like it's 60% -- we have done some reselling of both American and offshore systems to our customers. And over the past 1.5 years, we saw a very strong sentiment moving away from -- for the same reasons that most of the industry was moving away from offshore drones, it's all about security. And so -- but we did see that there was this gap in the market from a price standpoint and a quality standpoint to be able to -- and some feature standpoint to be able to introduce a LiDAR system that was priced below the existing market, still above where the Chinese market was, but it had the North American quality, access, customer service, et cetera, et cetera, that we can provide. And so what you're seeing there on your screen on the right-hand side is -- available. This is a highly sensitive system. This system could be flown on a low flying aircraft fixed-wing can be flown on helicopter. It actually even be put on cars or in a backpack. So it's highly versatile really nicely on the point car. So we've got great demand on this thing. And these units right now, these are a couple of hundred thousand dollar units. So does -- to really, really be moving the needle. So we're excited about the multi millions of dollars of revenue that we think just this product line will be generating for us. And we to in terms of developing out this product and really got it to market in record time. And so I really want to throw it out to the engineers and the product development team here. It's an amazing product and such. And not only that, the AI and the software part of our services, specific capabilities that other services cannot provide. So there's certain data out of this that we can pull and generate that's very proprietary to what Draganfly can do for its customers. Again, we want to be able to provide value-added systems that differentiate us from other drone in the market today. The other operational highlight for us in Q1, we announced going and working with Revived Soldiers Ukraine, an incredible organization doing humanitarian work in Ukraine. We announced orders with them. We started delivering our medical response drones, our search and rescue drones and our situational awareness drones into there. We've got units kind of going on every -- maybe 3 weeks. We've got more units that are going into over there. We're learning so much from it. We've made almost every shipment that's gone in has had some sort of upgrade, whether it's software or optics or it's just amazing what these drones are doing now and the experience that we're gaining, not just in the delivery market but also in the military market as well. The other thing that was really exciting in terms of Q2 for us was the trip that a number of is made over to the Ukraine to Kiev, met with officials from all types of different levels of government over there. And we are embarking on providing a solution into the area. We've got unbelievable interest from around the world on this, but in particular, our focus right now is in the Ukraine. For every day of war, there's 30 days of mine detection and removal -- are between as low as 20 and as high as 40 years in order to de-mine just Ukraine. So the market potential for this, unfortunately, is absolutely huge and the solution that we've designed and because we do is something that we've just not seen this comparable out there in the market. We've got terrific partners in the region and more and more partners coming on that were being introduced to all the time. So we expect some pretty cool announcements out of this theater and other theaters for this particular product line and service line -- . I just can't stress enough. But again, this was driven by a customer. This is one of those needle-moving opportunities. It just don't add 15% or 20% per quarter type of thing to the numbers, but really have the opportunity to double and triple the size of your organization. And again, it's proprietary type services and products that we're bringing to the table. -- so much about the people that we have on board and the people that we get to work with. So I you all, and I know you all wanted to get the most important stuff. So at this point, I'm going to turn it over to Paul Sun. Paul?

Yes. Thanks very much, Cam, and thanks again to all our shareholders and followers for taking time out of the day to listen in. So what you see here is 3 tables. I'll give you a quick snapshot of Q2. So looking at the income statement on the left here. As Cam mentioned, revenue for the second quarter was up 19.6% to $2.37 million, up from $1.9 million in the second quarter of last year 2021. Second quarter revenue comprised of $1.53 million from product sales with $837,000 coming from drone services. Our gross profit increased by $285,000 or 39.1% this quarter over the same period last year. Gross margin as a percentage of revenues was 42.8% this quarter versus 36.8% in Q2 of last year. This was a result of more sales coming from higher-margin products versus those sold in Q2 of last year. The total comprehensive income for the quarter was $640,000 compared to a loss of $8.1 million in the same quarter last year. And for those that have been following us for a while, you'll recall that there is an accounting treatment based on Regulation A financing that we did back in 2021, where there's a noncash change in fair value from derivatives that are included in these numbers. In this quarter, there is a noncash gain of just over $6 million from the derivative liability. So the comprehensive loss would have been $5.45 million. So exing out that noncash change in fair value of derivative liability of $4.8 million from -- or comparing it to the liability of $4.8 million from Q2 2021, the comprehensive loss would have been $3.3 million. So the year-over-year increase in the loss was mainly attributed to an increase in insurance costs, office and miscellaneous expenses and professional expenses. Following that, the loss per share would be approximately $0.16 per share versus the reported $0.02 or the $0.16 versus the reported $0.02. Going to the middle table on the balance sheet, you see total assets decreased from $42.1 million to $32.8 million from the year-end, which is largely due to the deployment of cash and the reduction of prepaids. The working capital surplus as at June 30, 2022, of $22.2 million would have been a surplus of $22.9 million and shareholders' equity would be $30.9 million versus the $30.2 million shown here if we ex out that noncash fair value of derivative liability of $696,000. You see that we continue to have minimal debt and our company's cash balance as at June 30 was $16.2 million compared to $23.1 million as at December of 2021. Finally, looking at the table on the right, since we spoke about year-over-year changes on the left side of the table with the income statement here, we'll focus on quarter-over-quarter changes between this quarter, Q2 2022 and Q1 of 2022. Revenue for this quarter again was $2.37 million. That increased by 16% compared to $2.04 million for Q1 of this year due to stronger product sales. Gross margin percentage for Q2 increased to 42.8% compared to 39.9% in Q1 of this year. The increase is due to the sales mix of the products that we sold. Operating expenses for Q2 increased 16.2% from Q1 of this year, in part due to higher professional fees and wages as the company is scaling and growing. And finally, total comprehensive loss for Q2 was $640,000 -- sorry, total comprehensive income was $640,000 compared to a loss of $6.2 million in Q1. And again, you know that the results include a noncash change in fair value of derivative liability, this quarter was $6.09 million. So exing that out, we have a comprehensive loss of $5.45 million compared to what we saw in Q1 of $5.06 million, so quite comparative quarter-over-quarter. And with that, I'll pass it back to Cam.

Thanks, Paul. -- as always. A couple of other things before we get to the Q&A that I think are -- -- in terms of our governance, this last quarter, we were thrilled to announce that John Mitnick is now our Chairman of the Board. My role has moved to continue to be -- well, but I've relinquished the Chairman position happily to Mr. John Mitnick. The Board since 2020 and John is -- you can see by his resume or bio on the left has got an incredible amount of experience. General Counsel for all of Homeland Security had over 2,500 attorneys report to him at that time. John is also a former General Counsel at Raytheon, which is, as we all know, a very significant multibillion-dollar military contractor in this space. And John just brings a tremendous amount of not just legal and governance experience, but industry exposure, contacts and really provides us a tremendous amount of insight and reach and so we're really, really proud and happy and thankful that John has joined us. Not just as a Board member but he's -- actually taking on the chairmanship role, along with the other excellent board members that we have. Paul Mullen, who is our VP -- of Vital Intelligence unit, which has been very successful for us, and we're really excited about some of the upcoming things there. He is now our Chief Operating Officer. This is the first time we've now had a Chief Operating Officer, as our business continues to mature and evolve. And really, thanks to Paul, he's been able to bring our last 3 -- well, our last 4 products, including VI. So I guess our last 5 products online very successfully and really is bringing a level of that maturity and recruiting and everything else to the business right now and really streamlining our operations. A big focus, not just as product but as also has been capacity. So us building out that capacity to meet the demand that we have and continue our growth and accelerate our growth in through next year is really a key part of what we're doing. So thanks, Paul, for that. Thrilled also to announce Deborah Greenberg has come onboard as our Chief Legal Officer. Deborah is incredible and was such an exciting hire for me. For the very simple fact that Deborah is much more than a lawyer, she has an IT background. She has a marketing background. She's an incredibly strong negotiator, totally level-headed. It jumped right in and was able to really add incredible perspective to a number of the negotiations that we have going on from a vendor perspective, from contract and from a customer perspective and just value adds in everything that we're doing. So while a Chief Legal Officer may be viewed as somebody that really helps strengthen our governance, which represents a lot of the type of growth that we have to have in order to onboard them, but the other that's improving our business development and our closing -- that sales cycle as well. So welcome again, Deborah, and thanks so much for being here. Everybody can see by her bio there, just why we were so lucky to get Deborah to onboard with us. We're not sure, but we're not going to question that we're just going to roll with it. So thanks, Deborah. In thinking about -- before we get to Q&A and thinking about Draganfly, there's really 3 things that we focus on is technology, its traction and its team organization is focused on solutions for customers. And that's really highlighted in that middle section there. Just we're hitting it every quarter, we're doing what we're seeing that we've done. We've hit our numbers, and we're doing it in a way we're not overpromising. It would be -- it's so tempting to talk about the massive numbers -- in the organization, but we've really stuck to the discipline of making sure our capacity is in place, making sure that our infrastructure and our admin, our ERPs and all the rest of it can handle what we see coming through this pipeline, while we're still managing to introduce new product lines and continue that kind of 20% just consistent organic growth and we think it's going to pay dividends for us. So that traction to us, the type of traction -- and also, we are a technology-focused organization. We like to build new tech, we like to do it in the focus of a customer. So we've got a strong patent portfolio. We've got hundreds of pieces of -- a lot of trade secrets, a lot of things that we do with and for our customers that really make it sticky, and we think are going to continue to put us in a position of that once you start working the Draganfly -- or alternatives. So we really like the -- our technology. And then we've got a team, if you look at our board, it's a very seasoned board. It gives us incredible reach, incredible depth -- in the world economics and politics that we're faced with right now. If we look at our executive team, I compared it against any executive team in the industry and not that there's not a lot of great ones out there, but this is a team that's really got the experience, both in terms of the drone industry, but also the entrepreneurial industry, the engineering space, the legal space and it's really, really gelling -- ... I am more confident than ever in our Q3, Q4 numbers already. It's just to have that visibility rather than to have -- beginning of the Q right out of the gate and worry about where and how we're going to get there. It's just such a great feeling to see where the -- ... On that front, I'm going to turn it over to Scott, and we're going to hit some Q&A. I'm going to do my best to not jump in, but there's already some Q&A here. I'm just dying to answer, but I'll let Scott and Rolly kind of take it from here for a little bit. Scott, Rolly?

Yes, I was just going to say thanks for the -- there's a number of questions that have come in online. We're doing our best to work our way through those. There was a number of questions that came in prior to the call, and we'll work our way through as many of these as we can and then also get to some of the ones that have been entered in and asked online. Cam, delivery is a hot topic in drones. We've talked a little bit about this already, but what do you think Draganfly's role in drone deliveries is going to look like both in the near and the for term?

Yes. Delivery is a big topic, and if you're going to be in the drone space and be a meaningful player, you're going to have to be in the delivery -- -- doing with our hardware, on the hardware side, the introduction of the heavy lift drone and the medium lift drone, which is our medical response drone. And even if we look at the construct of the XL, the 3 XL or the XL-3 story that they all have delivery components to it. You can look to the future for us in some VTOL work coming up and some fixed wing work. Some of the work that we've done over the Ukraine in the last quarter has been tremendous in terms of our winching technology, our AI in order to hover and drop -- in some cases, that's not necessarily as it relates to consumer goods, but certainly in the theater that, that is, that's really important for making sure that we get humanitarian packages and such right into the exact spots and areas that we want to. And it's probably amongst -- well, certainly, it's in the top 3 areas of interest that are continuously inbound on the solutions side. Hey, but here's the thing about delivery is we don't have people coming to us saying, hey, we want a delivery drone. What we have is we have organizations coming to us saying, we want to -- we need consulting. We need a particular type of drone as X,Y and Z. I could also -- I would also love to point to the work that we're doing with [indiscernible] in Texas and the work that we're doing there in terms of medical delivery, emergency response -- will have a big impact in delivery, and we're in revenue in those particular markets right now. So I think we're well positioned. We're not afraid to work with partners. There are some other people that have some fantastic technology in the space that we think is leading edge for them. We're also always building our own in there as well, but -- a big, big component of our business going forward.

Yes, another quick question, Cam. I'll send this one back to you as well. And then there's a few more that I'll answer on. Most drone stocks seems to be flat this year. Do you think we might start to see consolidation in the industry is Draganfly a buyer?

Yes, 100% Draganfly is a buyer, for sure. I think we're pretty selective, and we've got a very strong strategy as opposed in particular, what we're looking for and how we'd like to do that. We will see consolidation in the space. We just saw news this week of another big VC-backed $100 million, maybe $75 million investment, just -- business, people don't recognize that they get -- it's all glory and exciting, and it's just such a big opportunity, but it is incredibly particular and -- but so much more than just building an airframe. It's the rules and the regulations and the airframes and the software -- we think that there's going to be some opportunity out there. We're focused on revenue -- that are in the revenue space. There's a lot of really cool tech out there, a lot of great ideas, but maybe look to some of that on the services side as a buyer.

Yes, I think there's -- there's another question that kind of dovetails with that a little bit about what joint ventures that Draganfly entered into which ones are on the horizon? And what kind of revenue has been generated and what kind of revenue do we think might come out of some of these joint ventures. I think without getting too specific into giving guidance and giving and getting ahead of things that haven't quite been announced, but are -- but we hope are getting to that stage. We had a Board meeting earlier today, and we talked a little bit about this. In the last number of months, there has been inbound inquiries from international opportunities that have come into Draganfly from 5 or 6 different countries around the world. In addition to some of the ones that we've already talked about and some of the ones that have been mentioned in the past, but there is significant inbound inquiries, requests for information and answering to RFPs and so forth that have come into us from Europe, Asia, for sure, South Asia, different parts of South America, there's just a lot of work in there. And each one of those is joint ventures working with large, in some case, Fortune 50 type companies to provide both hardware as well as middle stream type, the applications and integration with drones and other technologies to come up with some of the downstream applications, the information that Cam was talking about earlier. So I don't think we quite want to get into giving guidance to that. But the point is that there's a lot of it, these are all long lead type programs, difficult customers in kind of far parts of the world in certain cases. But there's been a lot of that has come in. In fact, more than I think we've probably seen in any quarter in the history of the company. I don't think that's a bit of an exaggeration, but there's been a lot of that that's come in. And so we'll continue to report on those as we can as they become materials contracts and so forth are announced, and we're working hard on that and all of us are. Cam talked a little bit about DDL, how that contract is going as much as we can without getting ahead of ourselves, but -- what's the status of it? What does it look like? Any updates there?

Yes. Sounds great. So multiple industrial -- majority of the tooling is complete. There's still some work to do there. And in -- stock that we're managing through and such. So I think we're probably close to seeing revenue start to pop -- still somewhat hopeful for Q4, but that was a bit of a stretch for us. So -- but we're comfortable that the Q1 should be producing revenue there, they've had tremendous inbound -- on the product. I think just one of the websites alone has over 6 million inquiries on It's 50 minutes since we started. We try to keep these calls to 45 minutes, if possible. We've answered most of the larger questions. There's a number of questions here that have come in that are pretty specific in terms of line items on the financials. And I think we'd like to take some of those off-line if you want to call the Investor Relations to talk to Rolly both afterwards or e-mail in and say, hey, can I get a little more color on this? Or is there an explanation? I think we're happy to do that as long as it's -- we're not crossing any line here. But with that said, it's 50 minutes as is we saw it. I think we want to start to wrap this up call, Cam why don't you go ahead and wind this down and then we can go from there. End of Q&A: I'd love to answer. So don't be afraid to hit Rolly up, and we'll make sure we answer every single one of them as specifically as we can. It's technology, it's traction and its team. And those are the things that we're going to continue to focus on. We've hit our numbers, all our results. We really appreciate your support. We're going to continue to do that. We are fanatical about being #1 or number two over the coming years in this space, which is a multibillion-dollar space, and we appreciate your trust. Thank you.