Red Cat Holdings, Inc.

Ladies and gentlemen, thank you for standing by. Good afternoon and welcome to the Red Cat Holdings Fiscal Second Quarter 2022 Financial Results and Corporate Update Conference Call. At this time, all participants are in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. Participants of this call are advised that the audio of this conference call is being broadcast live over the internet and is also being recorded for playback purposes. A webcast replay of the call will be available approximately one hour after the end of the call through March 20th, 2022. I would now like to turn the call over to Scott Gordon, president of CoreIR, the company's investor relations firm. Please go ahead.

Thank you, Ilie. Good afternoon, everyone, and thank you for joining us for the Redcat Holdings Fiscal Second Quarter 2022 Financial Results and Corporate Update Conference Call. Joining us today from Redcat Holdings are Jeff Thompson, Chief Executive Officer of Redcat Holdings, and Joseph Hernon, Chief Financial Officer. During this call, management will be making forward-looking statements, including statements that address Redcat's expectations for future performance or operational results, Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in REDCAT's most recently filed periodic reports in Form 10-K, Form 10-Q, and REDCAT's press release that accompanies this call, particularly the cautionary statements in it. The content of this call contains time-sensitive information that is accurate only as of today, December 20th, 2021. except as required by law, REDCAT disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It is now my pleasure to turn the call over to Jeff Thompson, Chief Executive Officer. Jeff, please go ahead.

Great. Thank you, Scott. Good afternoon, and thank you all for joining our fiscal second quarter 2022 call and webcast. Also joining me today is Joseph Hernon, our Chief Financial Officer, We've completed many milestones in Q2. We were awarded a NASA contract. We closed the Teal Drones acquisition. We have brought on key hires for our business development and sales and opened a U.S. manufacturing facility in Salt Lake City. I will start and review our consumer companies, Rotoride and Bad Shark. Bad Shark is continuing to develop its digital system called SharkBytes. SharkBite is a high quality, low latency, high def FPV, which means first person view system. We are now seeing approximately 50% conversions from analog to digital. We expect that to add momentum to the 2022 calendar year revenue. We are also seeing crossover opportunities in commercial and military use cases. I'll now turn to Rotor Riot. Rotor Riot produces weekly drone media and has an online store where we can buy products seen on the weekly YouTube shows. Rotor Riot continues to grow and has over 235,000 subscribers. We are happy to report that we've been able to get most of our Rotor Riot supply chain issues fixed that were causing us to be out of stock on popular items. We expect the store to gain new users as Rotoride becomes a one-stop store for ready-to-fly FPV drones and has reliable inventory. Next, I'll talk about Skypersonic. Skypersonic has a drone platform that combines artificial intelligence software with the camera and sensors of the Skycopter Inspection UAV. They also have remote piloting capabilities, which breaks the one drone, one pilot drone problem. This capability was crucial in getting the five-year NASA contract we announced in September. NASA's crew will conduct simulated spacewalks and operations by remote piloting Skypersonic drones and rovers in a simulated Martian environment. Skypersonic's real-time transoceanic remote piloting platform will drive the piloting on both the drones and the rover. We believe Skypersonic software and hardware platform will benefit also from this recent infrastructure bill that was passed. There are millions of miles of sewer that will need inspections and hundreds of thousands of bridges that will need inspection. We expect Skypersonic to have an exciting 2022. Let's dive into our newest acquisition, Teal Drones. Steel Drones has built a complete drone platform. We believe it is one of the most capable drones in its category. I recently toured the new facility and was able to see the Golden Eagle fly simulated missions. Its performance was incredible. It's quiet, it's stable, and reliable. We recently announced the opening of a manufacturing facility of approximately 13,000 square feet. We have since decided to double the size of the manufacturing to 26,000 square feet. These new production lines will be able to produce thousands of drones a month. We have invested in machinery, robots, and inventory to meet existing and expected contract awards. Before we talk about contracts, I would like to talk about the recent events in the US. DJI was put on the Department of Commerce entity list last December. The U.S. government will place eight Chinese companies, including drone manufacturer DJI, on the investment block list. The House has a bipartisan bill banning existing government fleets of Chinese drones. The Senate has a similar bipartisan bill, and we expect both to pass. This gives Teal a great opportunity to fill the gap with maiden USA drones. By banning all federal dollars from Chinese drones, this opens public safety and first responders as a new category for the Golden Eagle. These new bills could also ground thousands of Chinese drones that will require immediate replacement from made-in-USA drones. So now let's talk about SRR. Most of the questions I get from investors is basically about the short-range reconnaissance tranche 2. The SRR contract is to put a drone in every rucksack. Teal Drones is almost two years into this process. We have nothing new to report, and we'll update our investors as soon as we hear back from the Army. I will now hand the call over to Joseph Hernon, our CFO.