Red Cat Holdings, Inc.

Ladies and gentlemen, thank you for standing by. Good morning and welcome to the Red Cat Holdings Fiscal 2023 Third Quarter 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 telephone keypad. 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 June 7th, 2023. I would now like to turn the call over to Scott Gordon, president of Core IR, the company's investor relations firm. Please go ahead.

Thank you, Kate. Good morning, everyone, and thank you for joining us on the Red Cat Holdings Fiscal 2023 Third Quarter Financial Results and Corporate Update Conference Call. Joining us today from Red Cat Holdings are Jeff Thompson, Chief Executive Officer, and Joseph Hernon, Chief Financial Officer. During this call, management will be making forward-looking statements, including statements that address Red Cat'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 on Form 10-K, Form 10-Q, and in REDCAT's press release that accompanies this call, particularly the cautionary statement in it. The content of this call contains time-sensitive information that is accurate only as of today, March 7th, 2023. 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. Welcome to our fiscal year 2023 third quarter earnings conference call. I'm going to keep my prepared remarks brief as I was just told we have quite a few email questions. So let's get some housekeeping out of the way. And I'll start with the status of the sale of the consumer division. Unusual Machines is expected to have its IPO later this month or early April. And that would cause the closing of this deal. And the proxy now has, the voting proxy now has a quorum, and we should have those results on the vote very soon. As a reminder, the sale of the consumer division will be a non-dilutive event and will raise cash for REDCAT and allow us to focus on our core customers, the military and first responders. The Salt Lake City factory is complete and ready to go. We now have a state-of-the-art drone factory. We have chips to make thousands of drones and we're only producing the new TL2 drone with the new camera payload. The TL team has done an incredible job completing this in just 12 months. We now have the capacity to produce thousands of drones per month. Let's switch gears and talk about Tranche 2, or Short Range Reconnaissance, SRR, Program of Record. As I have previously mentioned, Tranche 3 has been pushed into Tranche 2, and we will receive more funds from the Army to include these new features into Tranche 2. We do not know the size of the award yet, but it should happen in the next couple of months. Next up is the Border Patrol. We made our first shipment to the Border Patrol for 54 systems in mid-January. This was only a few weeks after production started on the new Tail 2. We believe there's a significant opportunity for additional orders this calendar year and are very encouraged by the feedback from the Border Patrol. On to Skypersonic, where I am now. Cypersonic, our indoor drone division, has two significant opportunities coming up. One is a Navy SIBR, we call it, or Small Business Innovation Research Project, for compact aerial inspection systems and for elevated and small spaces. This is a Navy SIBR, as I just mentioned. The program matches the Skycopter perfectly, and this is being actually submitted tomorrow, March 8th. So we're hoping to get into another program through Skypersonic. The second is the Drone Infrastructure Inspection Grant Act. This is a bipartisan grant for $100 million that is expected to pass the Senate soon. It has already passed the House. We also believe we are well positioned to be part of this grant. So I am doing this call from Torino, Italy. This is where Skypersonics office is, and we are co-located in the Leonardo campus. Leonardo is a large Italian defense contractor. In Torino last week, we were invited to the Diana NATO BOD meeting. And one of the goals of this organization is to introduce small companies to governments that need defense products. We had great introductions and we were only one of two presenters. The previous two weeks, myself and the business development team have been to at least five different countries. We believe it's been a very successful trip and the TL2 drone is getting a great response from operators and warfighters. We also received initial orders and we believe we are well positioned to be awarded a sole source contract for hundreds of drones. REDCAT also became certified in the European country to be included in their defense catalog, breaking the logjam to be able to sell to these European countries. And finally, we have identified opportunities to get the new TL2 to the Ukrainian warfighters, and I will address that in a little bit more detail in the Q&A. In summary, before I hand the call over to Joseph, we have completed a new state-of-the-art factory in Salt Lake City. with chip supplies to build thousands of drones. We have the best-in-class drone that is getting great response from the market, mostly military, and recently, as in yesterday, first responders. We'll have more to come on this new development in the next couple of weeks. We have our outdoor drones and our indoor drones for our military customers, and we expect the next six months to be the most exciting six months in company history with material sales, partnerships, and new products. With that, I'm going to hand the call over to Joseph to look forward to your questions.