Draganfly Inc.

Sorry for that little bit of a late start. A little bit of a tech issue on our end, but it looks like it's all clear now. So we're just going to get started immediately here. So right now you're joining us today for Dragonfly's 2025 Q2 earnings call. My name is Roley Bustos and I'm the internal investor relations representative here at Dragonfly. We appreciate you all joining us. As always, we'll start with our CEO and President Cameron Schell recapping the second quarter earnings headlines. Next will be a more detailed financial review with our CFO, Paul Sun. We will then conclude by addressing the pre-submitted questions that we've received. As always, we are welcome to reach out to me directly at investor.relations at dragonfly.com. 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, August the 11th, 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 page two of this presentation. So Cam, if you're ready, please go ahead.

Great. Thanks, Roli. Appreciate that, everybody. Terribly sorry for the delay and appreciate your patience and consideration. We're pleased to be hosting our 2025 Q2 earnings call. And just to start off with a couple of highlights. So our revenue for Q2 was $2.155255 million. This represents a Q over Q, that is a bit of a typo there. It's a Q over Q, 37% increase and a 22% year over year increase. Our product sales were $1.9 million last quarter and our provision of services was $213,000. We had $504,000 of gross profit, which is a 9.3% increase year over year. And we had a gross margin of about 24%. Our current cash balance as of the end of Q2 was just over $22 million. That's as of June 30th, but due to a subsequent financing, our cash balance currently is approximately $68 million. This has been a busy queue for us and there's been a lot of activity in the subsequent queue in the drone world. And you can see probably by the level of activity leading into the current queue we're in based on the last queue, the amount of work that we've done is reflective of what is actually unfolding in the drone industry. So a couple of highlights or a number of highlights. First of all, there is that our Commander 3 XL plus drops, which is a payload provider that we work with, which is a smart payload system, achieved a 100% success rate at the U.S. Army CEMEX 25 event. This is an incredible achievement, both on the part of our partner, Drops, the integration work that we've done, and the actual rigidity and ruggedness of the Commander 3 XL to be able to provide this incredibly rigorous result from CEMEX 25. So really, really proud of our product teams and our partnership teams, how they pulled this off and the coverage that we're getting within the DoD. Dragonfly also announced in Q2 the closing of a $13.75 million public offering, which again has really bolstered that balance sheet for us. And the market has responded relatively well. The Canadian, along with the Europeans, increased significant budgets for the modernization of their defense forces and increased spending for NATO. Now, in particular for Dragonfly, this is important because we do have such strong Canadian roots and are the only native drone manufacturer in Canada. And so what that enables us is that there's really only two manufacturers in Canada. One is actually owned by a U.S. company. And then, of course, there's us. And we've been around for 27 years now. We have strong roots into law enforcement and into the Defense Department up here and are very well positioned for that incredible increase in spending and budget and nationalization that's happening in Canada. So we do think we're very uniquely positioned in that regard. Now, Dragonfly was also selected for a U.S. southern border drone pilot program. And this is in Cochise County with the Cochise County Sheriff's Department, which is a renowned border sheriff's department, probably the the pinnacle of sheriff's department as it relates to border management. It's been visited by both President Trump and Vice President Vance and the governor, et cetera, and really is a boots up ground breaking organization in terms of how they man their their border there. So the biggest challenge that they've got actually is incorporating drones with their existing camera systems and AI. Existing drone systems today just don't have the battery life in order to complete the mission that they need. They've got, you know, a couple of hours of border to coverage and most of the, at least the, the, U.S. manufacturers for the types of drones that they were having only have about a 30 minute lifespan. And that doesn't even get them to the border in some cases, much less be able to be in a situation where they're able to hover, provide surveillance, help with interdictions or apprehensions. So we've designed with them an incredible border system. that has up to seven hours of flight time. It's a hybrid model. It has all the features of what a fixed wing aircraft could do. So hours and hours of ISR, surveillance type of capabilities, but also heavy payload capabilities. So it can carry over a hundred pounds into an area that's required to either deliver medical equipment, provide supplies for the folks on the ground, help with interdictions, hover over suspects, trail suspects. It ties into the AI system that they've got designed in Cochise County, as well as it provides point-to-point communications. This drone can operate at well over 11,000 feet. in various temperatures because of the extremes in the area. And we're thrilled to have been selected for that. That'll be a TRL nine or operationally ready by November and is really being now has become what is unexpectedly but very pleasantly surprised a showcase for other border agencies out there. So we're really excited about about our capability there and getting to work with Cochise County. I think the advantage the dragonfly And one of the reasons that we were selected there is we're willing to take the time and really understand the concept of operations that they were needing to address and to be able to take our existing platforms and adapt them into their particular concept of operations. Because Dragonfly has got 25 years, 27 years of experience, and we've got a full range of drones, which is fairly unique within the North American environment, other than, say, maybe a DGI, we can take those drones and accommodate them into the specific or the particular concept of operations for each one of our customers, whether they be law enforcement, military, or commercial. Further to this, Dragonfly, we showcased our tactical drone at the Innovation and Global Defense Summit in Latvia. That was an invite-only event. We were invited there on behalf of the Canadian Department of National Defense. And again, we were the only drone company there that had a full range of drones. primary drone that was really garnered most of the attention there was our FPV drone. So we did announce, as you can see on the next little block there, that Dragonfly announced delivery of our Flex FPV system to a major U.S. prime defense contractor. So this is a household name that you see out there that was looking to take our drones incorporate their technology into them, and then provide them as a prime into different departments of the defense. It's an incredibly unique design. It has some features that are proprietary to us, both in its capabilities, its payload capacity, It's integration with AI and such. I can't say much more about it than that. But we are getting terrific traction with this particular FPV in DOD, DNDs, a couple of different MODs, Ministry of Defenses around the world. So we're really thrilled. Now, what makes this drone unique for us is that we've been in Ukraine since 2022. And this particular drone was designed from actual experience in Ukraine as to what they're experiencing there, what are the aspects that needed to be incorporated or brought into that particular conflict theater. And so we're able to bring that experience back to our North American, European and 5i partners and not just be able to provide a great product, but actually help design concepts of operation. And you're going to see more and more of that with defense contractors over the coming years where they need to be integrated actually deeper into the process. And with Secretary Hesketh's announcement about moving the decision tree down to lower into the command level. This is exactly what they wanted to have accomplished, where they've got the boots on the ground that are dealing with the actual situations, helping design the product, not just from a product standpoint, but also from a supply chain standpoint and a training standpoint to be able to do modifications literally in hours now, as opposed to years. We also announced the establishment of our Public Safety Advisory Board. Paul Goldenberg is heading that up for us. Paul comes from an incredible career in law enforcement and homeland security, and he has, with his team, has absolutely lit up the public safety market for us. We have participated in a half a dozen exclusive conferences throughout the United States and now in Europe as well, featuring our full lineup of drones. And again, our drones are multi-use and multi-mission, and that's really the capability that we're highlighting within public safety. is that often you may have one drone that I'll say our competitors are selling out there, which is a very good product, but it does one mission, and that's generally an ISR or a surveillance mission. Where you bring in something like the Apex, it is a little bit bigger. The advantage, however, is that now you have a multi-mission drone that can do everything from ISR, to search and rescue missions. So really great for those small and rural or campus or tribal situations or larger departments that have missions that are beyond just surveillance type missions. We did close as well an additional $3.6 million of capital. I think it also should be noted that we had about $8 million worth of warrants that were exercised in this current quarter. And that's why you get such a strong balance sheet that we've now accomplished in this last two quarters. As noted previously in years that have passed, we are very active in the demining space. The demining space to us is a strategic imperative. It demonstrates our public safety and our military capabilities. So we announced that Dragonfly and Autonomy Labs signed and are working on a teaming agreement to take their UAV-based demining mesh deployment solution. So what Autonomy Labs has is a mesh net that fits over a contaminated area, whether that's in an active theater or whether it's in a benign theater, but it needs to be cleared. And it actually explodes everything that's underneath that mesh net. So what they've exclusively signed with us is the ability to deliver that net using our Commander 3 XL and heavy lift drones over a particular area. Now, what's interesting about that is that actually allows for a much more rapid deployment of this. So it moves it from not just a humanitarian, but also into an active theater scenario as well. So we're thrilled about what's happening in the demining space, the leadership that we're taking there and the work that we have done. Now, we were active and did complete some demining missions in Ukraine in the last quarter as well, which again informed our AI databases. And I would say that we are participating in probably or most likely the most advanced AI system for demining. Now, right now, demining is really still centered around mapping anomalies that are on the ground, primarily using hyperspectral. But there are many other sensors that are involved as well, everything from ground-penetrating radar to magnetometers, to RGB. But the multispectral, along with those other sensors, is providing great AI data that we're hopeful eventually will allow for very accurate and rapid demining operations. Peter Lambrakonakis, sorry, Peter, if I butchered that a little bit, has also joined our advisory board. Peter's public safety record is second to none. He is a former member of the Montreal Police Department, where he held several very senior positions. He was also the founding chief of the Via Rail policing system, along with many other attributes. He also is on the Faculty of Public Safety at the University of Ottawa. In addition to that, he sits on the Military Police Board Commission. Dragonfly was selected by Safelane for a multi-year landmine detection partnership that was in Ukraine, and we're working on several other initiatives with them as well. Safelane is the largest demining and ordnance unexploded IED organization or corporation in the world, and we're thrilled to have a partnership with them. We were also selected by Belco as their UAS provider, and they have placed multiple orders with us. Belco is the manufacturer of an incredible LiDAR system, and we have been able to work a fantastic partnership with them whereby they have moved some of their systems that before had to be used on helicopters can now be used on our drones, and they're meeting with great success because of the fantastic work that our team and they have done together in terms of able to providing a fast, rapid and inexpensive comparatively solution to what was available before. And this payload partnership strategy that we have is really important to us. So our systems are designed to take multiple payloads. We do not put proprietary payloads. We do have some proprietary technology in terms of some of our integration and certainly in terms of some of our AI, but we are payload agnostic. And the reason that we want to do that is we want as many of those payloads out there incorporated with our drones so that they're actually a channel partner selling our drones along with their payloads. And what we'll find across commercial, military and law enforcement is the fact that quite often what they fall in love with is a particular software or payload or sensor that meets their specific need. And when it meets their specific need, the next big question is, okay, what drone can carry that specific need? And at this point, I would hazard to say, but I will say that we are likely, certainly a leader, and maybe the best, certainly North American company out there that can provide multiple payloads, including old DJI payloads that are not Chinese made, but they can incorporate payloads that were used on DJI drones. Now, why is that important? It's because the investment that's made by organizations in their payloads or in their sensors can now be transferred onto Dragonfly drones without having to necessarily repurchase those particular sensors, while still removing the Chinese drone, which is now becoming a mandate, not just in military and law enforcement, but now across many commercial organizations as well. We did secure a strategic military order for the Commander 3XL UAV systems. This order was an initial order of many further systems to come behind it. It took us literally a couple of years to get these orders between capacity testing, product testing, concept of operations understanding. And then integration of those particular payloads that are being used onto the Commander 3 XL. This particular order was a direct order. It wasn't necessarily through a prime. And we're thrilled at the implications of what this means. And likely... programs of record that follow very quickly behind this particular and other orders that we're working on right now. We did announce recently here as a subsequent event, the closing of a $25 million registered direct offering with existing shareholders that were in the company. And so we're thrilled to put that together and we thank them for their ongoing support. And then the Commander 3XL on a separate contract was selected directly by the U.S. Department of Defense for very specific missions that the 3XL was designed to carry out. So I think overall within that military command, we are developing a reputation for being able to understand concepts of operation, taking our full product suite and being able to adapt the dual use, which is a big mandate within the military for very rigorous but specific military operations. Every time one of these happens, it gives us further exposure to additional military units and additional arms within the DOD. So each one of these things, the implication of a win is much bigger than necessarily just the sizes of those wins, which are still material. And we'll start to continue to see those results pay out over the following quarters. As mentioned a bit earlier, we are, at least to my knowledge, probably as a North American manufacturer, have the most extensive line of drones. And this isn't something that you just can put together and, hey, let's build more drones. And at times we've been uh criticized for not being focused on one particular type of drone but it is important to keep in mind that we have 27 years of history and so you've got platforms that have been developed over a much longer period of time with much more air time and testing than say many of the even longer or long-standing drone companies in north america that are maybe seven or eight years old and so a function of that legacy is really important to us and it's something that i continue to uh to highlight but you can see that we range everywhere from a very small fpv drone that's the smallest of five inch arms and blades all the way up to our heavy lift drone which is about nine feet across and what isn't on here is actually some additional product that's bigger and the Kochi County Border Patrol drone, which is a version of that heavy lift drone on the first one there on the far left, but is a hybrid with a combination of engines on it. So again, these all work on similar flight systems. They have similar flight characteristics. Everybody's only training on them once. You know, for the most part, if you can fly an Apex, you can fly a heavy lift. And from a training perspective, all of that is incredible. incredibly important for our customers. All of them have the same universal mounts, which are universal to the industry. And again, we're payload agnostic, and we really focus on integrating our payload partners for optimal performance into this product line, thus creating a bigger channel and more versatility for the Dragonfly line. So I do think it's important again to highlight the military impact and what's happening throughout the entire world and how fast it's growing and the final adoption now that is starting to happen within militaries. And that universality amongst our drones is really playing a big part in the success that we are seeing in this particular area. Along this line, I think it is important to note that we do manufacture both in Canada and the United States, and we have very strong representation throughout the entire world. Again, a bit because of our legacy, but also because we have footprint in Canada and in the United States, which is unique amongst drone manufacturers. At this point, I'm going to throw it over to Paul Mullen, who will run through the details of the financials. And then I believe Roli's got some questions that have come in.

Paul? Yeah, thanks, Cam. Thanks, everyone, for joining. So as Cam mentioned at the outset, revenue for the second quarter was $2.1 million, up 22% from $1.7 million in the second quarter of 2024. Second quarter revenue comprised of $1.9 million in product sales, with the balance coming from drone services. Gross profit 505,000 this quarter compared to 462,000 in Q2 of last year. This quarter had a one-time non-cash write-down of inventory of $10,000 and otherwise would have been a gross profit of 515. Gross profit for Q2 of last year, same period, would have been 596 if we took away the one-time inventory write-down that that period had of 134,000. And taking these non-cash items into account, gross margin would have been 24.4% for this quarter compared to 34.4 year over year. Total comprehensive loss for the quarter, 4.7 million compared to a loss of 7.1 million in the same quarter last year. This quarter included that non-cash write-down of inventory of 10,000. It also included a derivative liability loss of 180,000. and a gain on a notes receivable of $8,000 and otherwise would have been a comprehensive loss of $4.6 million. Same period last year, had a one-time change in non-cash derivative liability of $2.6 million. 134,000 inventory write down and a gain on impairment of notes receivable of four and otherwise would have been a comprehensive loss of 4.4 million. So the slight increase in loss is due to higher office and miscellaneous costs, wage costs and share based payments offset by professional fees. Cam, if you can just go to the next slide there on the quarterly side, we just went through the year over year changes. So here we'll just go through the quarter over quarter changes. between Q2 and Q1 of 2025. Again, Q2 25 increased by $567,000 to $2.1 million up from the $1.5 million in revenue we saw in Q1 of this year, an increase of 37% due to higher product sales. Gross margin percentage for Q2 again was 24% compared to 20% for Q1 of this year. Again, if we back out that one-time inventory write-down that we mentioned before for Q2, And $39,000 that we had to back out for Q1, gross margin for Q2 would have been the 24% versus 17.5% in Q1 of this year, with the difference being products mix during the various quarters. Comprehensive loss for Q2, as mentioned, $4.7 million compared to $3.4 million for Q1. Again, remember we had a loss in fair value of derivative liability, a write-down of inventory, and a gain on notes receivable. So that adjustment would have got us to $4.6 million. If we did the same for Q1, we would have got to a loss of $3.6 million. And again, the increase in loss quarter over quarter primarily due to higher office and admin and some wage costs. Moving on, I think to the last slide here, Kim, on the balance sheet, you can see our total assets increased from 10.2 million at the end of 2024 to 28.4 million, which is largely due to the increase in cash that Kim talked about earlier. Working capital at the end of June 30th was 22.4 million versus 3.8 million at the end of December. However, if we X'd out that fair value of derivative liability of 2.2 million that we have on our balance sheet, working capital would have had been a surplus of 24.6 million this quarter and 6 million at the end of December of last year. Doing the same exercise for the shareholders' equity at the end of this quarter would have been 25 million versus the 22.9 million shown here and the 6.8 million at the end of December versus the 4.6 million shown here. And as always, we continue to show here that we have minimal debt. And I think Kim also mentioned cash at the end of the quarter was 22.6 million, but subsequent due to the warrant exercises and the July financing were approximately at 68 million in cash. And with that, I'll pass it back to you, Kim.

Thanks, Paul.

Um, so on that note, um, I think, uh, if you take the, uh, overall comprehensive loss inclusive of, uh, derivative liabilities, what we'll see is that our revenues continue to increase pragmatically at this point, uh, where we continue to manage costs. And in fact, we're dropping our, uh, our overall, um, uh, operating expense as a percentage. So, uh, I think it's also really important to note that none of these sales here represent the large outlier sales that we had been working on for a number of years and had built our capacity in order to facilitate. And that's really the boom, I guess we can call it, that I think all the shareholders and management have. are working toward. And I think it's really important to continue to note that I think we're very well positioned to participate in the drone future. So on that note, why don't I throw it back to you, Oli? I think you had a bunch of questions. I think you sent some of them over to me this morning. I apologize. I haven't had a chance to look at them yet, but I look forward to answering them now.

Okay. Thanks, Cam. Yeah, honestly, you've actually answered a lot of them in the presentation. So I'm going to kind of bounce around a little bit so we don't repeat ourselves. Let me just start with the first one here. A shareholder sent me in. He said he noticed that Dragonfly has been on the AUVSI green list pending for a long time now. Can you comment on this? And what, if anything, does the new drone memo by Secretary Hegseth mean for these classifications, for example, the green and blue lists?

Yeah, that sounds great. You know, I've said this before, and I'll say it again, and I got to take the hit on it. When the blue list first came out, I was, you know, opposite from our management team i was like hey this this blue this thing's not that important it's going to be a marketing thing we're already selling into police we're already selling into the military uh we've done military contracting for years and years like why do we need to be on the blue list i don't get it we're we were ndaa compliant before there was a such thing as NDAA and have always been very conscientious of our supply chain. So we didn't pursue it. And that was a mistake on my part. So we have various units that are now in on blue list testing. We have also submitted to green list. There was confusion for quite some time. But if clarity, excuse me, if green did equal blue or blue did equal green. And now we do have that clarity that that it is. And right in the midst of that, now the Defense Innovation Unit has announced they're coming out with a number of other adjudicators that will also be able to provide the clearances or the testing for for blue list. So so we're in the process of it. There's no abnormal delay around it other than the kind of the clarity around all the regulations and what it means. It has not stopped us from selling into defense and into law enforcement. most of the large defense decisions are still being based around capabilities, performance, capacity, and personnel. Those are really kind of the four key factors. And if you can demonstrate those, and in our case, we clearly can demonstrate and have been through audits and such that our supply chain, all four of those factors meet the criteria and such. And so as these large orders come through, there are plenty of waivers available to the different departments and commanders within the DOD in order to get the waivers because you do pass those tests. So it's certainly not that it's a priority to us. It's just that it hasn't prevented us at this point from any significant order or held us up in any particular way. Secretary Hesketh's memo and the positioning of the Defense Department recently further does validate this, not suggesting that blue isn't important and not suggesting that we're not going to continue to pursue it. And if anything, all of those waivers that need to be done at a command level in order to accept something that's not on blue still has to be done. So if there are a number of other, you know, which there are lots of startups and hey, let's build drones. And, you know, a lot of people think it's easy. It isn't. And that process is not going to get easier. It's just that there's a mandate for the at a command level for people to go out and get what they need. And so it really plays well for somebody like Dragonfly.

Great. Thanks, Cam. I'm going to jump to the next one here. It seems that you now have a very healthy cash balance. What plans do you have for these funds?

We're still very focused on organic growth. Capacity building is in place, fortunately, and thanks to our shareholders. And so we're going to be very pragmatic with our cash. We are scaling in particular our ability to iterate funds. even quicker. So this is a key function within, in fact, not just military, but within police and commercial. Drones are a competitive advantage, but everybody's going to have them, which is great for Dragonfly and the drone industry. But the differentiator will be how quickly can you iterate? So a lot of our focus is on that. That does bring up us taking a look at some M&A activity. And we do have some of that going on. However, it's not our focus, though there's some pretty cool and exciting things that could unfold in that direction. But again, we've managed to stay in business for 27 years because we don't make a lot of knee-jerk moves. And so it's also why we don't provide guidance. Other comparable companies out there provided some really robust guidance. And from an order standpoint, I 100% believe their guidance. From an execution standpoint, It's very, very tough to scale in the way that they want with the types of products that the industry is demanding. So basically what it means is that we're going to be able to do what we say and that our customers, which are very large customers, have a lot of confidence now in our balance sheet so if ever before that was a question them saying hey you're a small company you know you're only like 60 70 people can you execute you know you've only got that you know a few million dollars on your balance sheet you know do we really want to make a bet on you right now this is a big insurance policy for them and that's the biggest impact Not that we won't use it wisely, not that we won't use it to drive growth, but right now, you know, proving that product up and ensuring that our customers have confidence in us, which is inclusive of a strong balance sheet is really the most important thing.

Great. Thanks. That's very helpful. The next one is kind of just an extension to the capacity issue you've been talking about. With hopeful, meaningful contracts coming, can you comment on on how you're positioned in terms of production capacity to fill them. Are we able to scale quickly if need be?

Yeah, there's a few aspects to this. So first of all, we built up our production capacity over the last couple of years, which was actually a requirement to even get to the point of being able to get the orders that we have coming in now. So now that we have the confidence and we've demonstrated the capability to build capacity in short periods of time and iterate in short periods of time in very specific ways, uh but but widely needed and used uh concepts of operation uh were very well positioned um we are uh also continuing to pursue uh additional contract manufacturing uh capability so that we can scale even more but that is like that's more than an announcement like you just don't go oh yeah we signed a contract like I'm not so sure how other folks out there in a matter of months. I mean, we've spent 18 months evaluating the contract manufacturers that we were going to go with, designing tools that can fit into their operation, ensuring that they've got the right personnel, ensuring that we've got the personnel that can train the right personnel, ensuring that they can iterate just as fast, understanding their supply chain management, working with our customers to understand how their supply chain requirements fit in with our contract manufacturers. So candidly, I feel like some of the announcements that have been made out there have been like, hey, we got to get an announcement out there about scalability and contract manufacturing. And again, I haven't evaluated their decisions. It's not my job to do that. But I know from our process is that you don't, that's just not something that you can take lightly. So we're really, really thrilled about our direction there and our capabilities. And it really comes down to when you sit in front of that customer and they ask really detailed questions. They don't ask the question, can you contract manufacturer? No, they want to know the nuts and the bolts and the serial numbers and everything. and inventories on hand and their personnel. So it really gets into a detailed approach that you don't have a second to hesitate on those answers with those particular customers. So I think we're positioned well, probably not perfectly, we'll make some mistakes, but I think we got this.

Great, thank you. Just a couple more here. Given the recent surge in police departments adopting drone as those first responders, can you comment on whether Dragonfly has seen inbound interest or engagement from agencies considering this model?

Yeah, everybody is interested in it. And what's interesting about that public safety market is that the very large departments have spent the last maybe 18 or 24 months, other than a few innovators who have even been at it longer than that, with DFR, Drone as a First Responder, which is going to be an absolute game changer for public safety. But most of the inquiries we see coming in today are still like, about regulation, about, you know, how do you train pilots? Like, I mean, they're still trying to figure out budgets. There's still a lot of question, believe it or not, about whether it's going to be Chinese allowed or not, which it's not, in my opinion. And whether that's right, wrong, or indifferent doesn't matter. The point is, I believe it's not. And so the inquiry levels are still really there. Now, again, some of the larger departments are have adopted or are in the process of adopting in some really innovative departments, maybe a dozen of them in the States are real leaders in this regard. So in terms of having multiple drones that can fit into a DFR response, not just with just an ISR drone or just a VTOL or whatever the case be, but drones that are actually multi-mission is weighing heavily into the decisions and the positioning that we've got. So in terms of the boxes, the response, the automation, that type of stuff, it's all stuff that's well within our capabilities and we're very active in that space. You know, candidly, we're not focused on the really really big departments there's other competitors there that are in there with their small isr drones they make a great product they are willing to spend heavily to earn that business we think long term that will be there but if we look at all the rest of the market out there which is the majority of the market being small rural campus tribal private security. That's where we're just getting tremendous traction right now. And of course, they're dealing with much less different type of budget constraints. Sometimes the budgets are smaller, but they're quicker to move. Sometimes in the private security space, they're much larger and they're quicker to move. So we like where we're at in that space, and we're going to continue to focus down that. Again, we have such a strategic advantage with our board of advisors. And the other aspect of police enforcement that seems to be working really well for us is international, being up in Canada, over in Europe, in the UK, parts of Eastern Europe, and some parts of Asia as well, because of our NDA compliance and our multi-mission drone platforms.

Great. Okay, I'm just going to give you one more question here, but I'll just remind everyone on the call that If your question did not get answered, or if you have another one, please reach out to me, investor.relations at dragonfly.com. And as always, I'll try my very best to answer it for you. So Cam, it seems possible that an end to the Ukraine conflict might be coming. Does this negatively impact Dragonfly or the drone industry as a whole?

Well, I think, you know, the cat's out of the bag and the unfortunate Ukraine conflict has absolutely revealed the imperative nature of drones. So what we're seeing is now the rest of the world grasping and catching on to how and why they need to use drones. That conflict, I don't. I personally believe even if it comes to an end tomorrow, drone use will likely continue to increase. So the primary drone use right now is FPV over there. That drone use, if that contact... conflict were to end tomorrow we'll go to uh isr logistics uh demining uh you know reconstruction i mean the list just goes on and on and on and in fact in many respects uh different types of drones i think again that are reflected by a product line that we have uh will get uh will get used so um There's not a lot of North American drones being sold in Ukraine. The Ukraine are incredible innovators. They're incredible engineers. I mean, they are purpose building their product and going hard. So the internal industry over there would change greatly, but the posture of the external industry outside of Ukraine would not, other than the fact that it's incredible teachings, learning and training ground for us.

Okay, great. I think that'll be it for the questions, Cam. To respect everyone's time, I know we started a little bit late. If you can just give some final thoughts to everyone on the call.

Well, first and foremost, I really want to thank our shareholders for their consideration. I know it's been a long haul for many of you, many of us as well. So whether you're new or old, we appreciate the trust and we take that very, very seriously. Our customers, thank you for your consideration and trust, and we're going to continue to work hard to make you uncompetitive, meaning that nobody can compete with you. So our internal goal is to give you a strategic advantage. And then certainly to the team members at Dragonfly, I know how hard you're working. Your commitment is inspiring to absolutely everybody, including our customers in terms of what you show to them. So we're just sitting here in a lot of gratitude right now. We know how much work we have to do and we know we're going to just grind it out. And, you know, we'll be here for the long term and appreciate everybody's support.