All right. So just to be respectful of everybody's time and to start on time, we will get started. So hello, and welcome again to the Draganfly 2023 Q1 earnings call. As usual, my name is Rolly Bustos, Internal Investor Relations here at Draganfly. I welcome each and every one of you today, shareholders, stakeholders and analysts. The format will be the same as previous and then I'll begin with our CEO and President, Cameron Chell, discussing the first quarter operational highlights. From there, our CFO, Paul Sun, will jump in and discuss the financials as reported earlier. And as always, we'll conclude with our Lead Director, Scott Larson, facilitating the Q&A portion. You're always welcome to reach out to me at investor.relations@draganfly.com after the call if your questions did not get answered. Lastly, I want to remind everyone that this presentation may include forward-looking information and statements. These statements are not guarantees of future performance and undue reliance should not be placed upon them. Any future events or financial results may differ from what might be discussed here. The full forward-looking disclaimer can be found on Page 2 of this presentation, and I'd be happy to send that to anybody upon request. So Cam, please go ahead.

Great. Thank you, Rolly. Thanks, everybody, for taking the time to be here today. It's an honor and a pleasure. Just pull up the screen share. And -- so welcome to our Q1 2023 shareholder earnings call. Thanks, Rolly, for reviewing the disclaimer with us. To immediately and right to the point, review our financial results for Q1, which given all of the circumstance around we're very happy within we think it's set a great platform for the coming quarters going forward. So we had revenue of $1.6 million or just over that. Of that $1.38 million of that was product sales with basically the remainder of that in service provision. Our 2023 Q1 gross profit was $443,000, which represents a 27.7% gross margin, but I think it's very important to note that, that gross margin would have been $500,000 or comfortably over 30% have we not included a onetime inventory charge of $77,000, again, taking conservative action at the advice of our finance team and auditors. Our March 31, 2023, cash balance is $13 million. So we're in a strong financial position still and continue to be on budget. This is a bit of a review for some, but a level set for a number of new shareholders that we'd like to welcome to the company, and thank you for your trust and the opportunity to serve. Draganfly is recognized as a global commercial leader in the multi-rotor space. And we are a rapidly growing drone manufacturer and solution provider. We do have a strong emphasis on artificial intelligence and data analysis capabilities. We've been saying for quite some time now that five years from now, Draganfly will be known as a drone company. But really we're a data company. And at the end of the day, data is…

Thanks, Cam, and thanks, everybody, for joining. So looking at this table here, we'll go over the year-over-year comparisons for Q1 of this year versus Q1 of last year. So revenue for the first quarter was down [1%] to $1.6 million from $2 million in the first quarter of 2022. As Cam mentioned at the outset, revenue comprised mainly of product sales, $1.38 million with the balance coming from drone services. And as mentioned earlier, some of the reduction in revenue is due to new products cutover and production capacity build-out. Gross profit was $443,000 due to a onetime write-down of inventory and otherwise would have been $520,000 for the quarter and as a percentage of revenues would have been 32.5% this quarter, which is down 7.4% from the same quarter of last year. Again, this is a result of more sales coming from lower-margin products versus those sold in Q1 of last year, as the product mix just changes from quarter-to-quarter. Total comprehensive loss for the quarter was $7 million compared to a loss of $6.3 million in the same quarter of last year. This quarter, as mentioned, includes a noncash change comprised of derivative liability of $57,000 and a write-down of $77,000 of inventory and would otherwise be a comprehensive loss of $7 million. So no real big change there versus an adjusted loss of $5 million a year ago. So the increase is due to higher office and miscellaneous advertising, marketing, IR wages, partially offset by lower insurance costs. So continuing to focus on the quarter. If we now look at the table on the right, since they just went over year-over-year changes, we'll look at quarter-over-quarter changes comparing this quarter to Q4 of last year. So in this case, revenue actually increased 22% to $1.6 million…

Thank you very much, Paul. That concludes the formal presentation. I think we're lucky enough to have some Q&A at this point. So I think I'll be turning it over to Scott.

Yes. Thanks, Cam. We have a number of questions that came in before the call. And of course, feel free to send the questions to doing the call as well, of course, as some come in right now. I'm just going to go through some of these questions and I'd be screening them and send them back and forth to either Paul or Cam as they come in. So first question here, Cam, talk a little bit about Ukraine. Is this an area that we still want to be putting time and effort into it, what does it look like over the next six, 12 months? We haven't talked too much about customers, but what do you think the Ukrainian efforts that we're going to do is -- will impact Draganfly in the future?

Yes, great. I'm really glad somebody asked this question because I didn't focus on it purposely during this particular call because we wanted to get through and really talk more about where we're at on the product side, which has been a big focus of ours this last couple of quarters. Obviously, Ukraine remains strategically imperative to us. It's a very, very important. It will -- in the future, if you are a player in Ukraine, you will be a credible player going forward in the UAS market. Obviously, not just in the commercial market, but on the defense side. The numbers that we talked about at the beginning, those industry numbers really don't account for what has happened in Ukraine and in terms of what I refer to as air dominance, and how budgets are now shifting towards that. I would say that the primary reason that we have so much activity in our military business right now is quite frankly, because of the credibility that we've built up in theater in the Ukraine. So we're there with pilots. We're there with people on the ground. We're doing de mining. We understand the search and rescue, we understand reconnaissance and basically the skill of what it takes for pilots to work. We have a product that is hardened in those areas, and so that's a whole bunch of credibility as we are moving forward our military prospects here. So just from that pure prospect, it's really important for us to be there. Now in terms of revenue generation out of Ukraine, we have been very focused on the mining market because it also has a much -- it has a very large global footprint. And it's not something that's been comprehensively tackled by somebody in the past because it's one, it's tough work. But two, there's not really ever been this active of a theater in order to be able to do it. So we do have expectation of some significant announcements that will be coming from that particular business. But in terms of other drone sales and training, we are active in the region and we have to be a little bit careful with announcements and such, but we expect Ukraine in particular, to be a large revenue source for us and really kind of a stepping stone for defense budgets over the next seven to 10 years, which will be at absolute record doubles in particular for drones and things like AI.

Can you talk a little more about the production capacity? What does that look like? How is that scaling up? We've talked about it at the last call. Maybe give a little more color there, if you can.

Yes. So without saying things that probably might be a little close to the edge. We -- on the new product lines, we are at a spot where we could produce tens at a time. And now keep in mind that, that was also because we're making product adjustments based on customer feedback and tests and all the rest of it. And now that the product at 3x in particular is hardened, we've moved to be able to be producing hundreds in a short time frame. And then by two of next year, we'll be in the spot where those kind of scales are in thousands of a short time frame. So that's a combination of the new plant opening up. It's a combination of new processes being implemented. It's a combination of some continual redesign on those products so that our production capacity is optimized and we have less supply chain risk. These are all the things that like when you're in manufacturing, especially in an industry that's so new, it doesn't have set requirements coming out or even government regulations in some cases that would over -- provide oversight on how certain things have to be done. You're in this kind of continual flux of like, okay, what does the customer need, what can the actual customer do and such. So it's a very, very tough business and very tough time to build scale, unless you're in like kind of like a consumer space where those things don't come into effect. So anyway, I think we're there now, and we look forward to filling the backlog and having some financial results to demonstrate that.

Yes. Okay. Good. Any progress here with Windfall Geotech in regards to land mine detection or some of the downstream stuff that we talked about with them before?

Yes. So they're active with us in our work that we're doing in the Ukraine. And certainly, the AI system that continues to value as we gain data, we think will be game changing in the space. So we're thrilled to be working with them. We have a strategic imperative to develop this out with them. And this is now moving over actually into our mining business as well more and more. So I'm pretty excited about what's going on in the mining industry in terms of the size and type of drone that they are moving to, which fits very, very well with our 3XL. And then, obviously, a number of the other players in the industry other than a couple of monitors that we're dealing with moving to this AI software for prospecting. So I think our mining offering will be second -- well, probably already is second to none, but we'll start to see some scale around in the next Q, maybe 2Q.

Paul, so maybe I'll throw this back to you. Can you talk a little bit more about the cash position, current cash burn. Maybe a little more color just on the financial statements that we just released talked about. We did a financing, of course. We don't give guidance, we never have. But what kind of runway does this look at how we -- in terms of expenses, things like that, without getting too much detail, but maybe a little color and commentary on that, if you can.

Sure. Yes. So we announced an $8 million financing right at the end of Q1. We also announced an at-the-market transaction, which gives us, I think, flexibility to pull that we need it. As we've always said, we do balance cost versus scaling. Cam just spoke a lot about how we're building capacity expansion, positioning ourselves. We have a lot of great initiatives. So I think it's really on us to kind of decide how we deploy. If you look historically at our cash burn, it's anywhere, I guess, between $1 million and $1.5 million kind of thing a month. So that's not necessarily to say that that's going to be -- as Scott said, we don't give guidance, but kind of give you a sense of the range. If you look back at our quarters, we are cash flow negative right now. Our losses do fluctuate, though. This loss this time was better than last quarter and sometimes it flips back and forth. So we are cognizant. We have a healthy cash balance right now. So I think that gives us a lot of flexibility, and that can give us quite a bit of runway to do the things that we have in our business plan. So hopefully, that's again, got to be careful to not give too much detail, but hopefully, that helps a little bit on the context.

Yes, good. With regards to the questions that came in advance, I think that's all of them actually. There's been a couple that have come through during -- a few that have come through during the call right now, and those are in the process of being answered maybe just a real quick one here, a technical one.-- how many shares do we have on outstanding, Paul?

Yes, we are at 43 million-ish.

So that is -- that's all the questions. That's all the questions that have come in. And all the questions that we've answered that were e-mailed in before. And there are still one or two that are still being answered right now, just ones that are answered in the chat for those of you who have sent those in. So we'll continue to do that. So I think with that said and done, Cam, unless there's anything else, I think we can probably sign off. I'll let you go ahead.

Probably everybody was relieved at that. So I was just trying to get through a couple of questions in the chat before we signed off. Yes, so thanks, everybody, for your time and consideration. I have an opportunity to talk with a lot of shareholders and really appreciate the faith and trust, and we'll continue to work to be of service. The AUVSI show right now in the SOFIC show are really indicative of what's going on in the industry. And to say the interest is overwhelming is probably accurate. And it's really because we have a product that's ready for the market now. And the majority of the rest of the market doesn't. They have product that's either going through testing or it looks good or -- and not that there isn't other product out there that's available, but there's a real source and a real opportunity. So it's been a long haul. It's been a struggle. We'll continue to work this through -- and -- but it's difficult as it is for us, it is for everybody out there. And -- but I think we're there, and it's fun to be on the road selling. Not that -- I love product building as does our team, but it's fine to be on the road selling now that we can start to deliver. So thanks, everybody, for your time and consideration. And please follow up with any questions that we didn't get to with Rolly, and he and I will do our best to get back to you as soon as we can.