Draganfly Inc. (NASDAQ:DPRO) Q2 2023 Earnings Call Transcript

Draganfly Inc. (NASDAQ:DPRO) Q2 2023 Earnings Call Transcript August 9, 2023

Rolly Bustos: All right. To be respectful of everybody’s time, I think we will get started. So greetings and welcome to the Draganfly 2023 Q2 earnings call. My name is Rolly Bustos, and I’m Internal Investor Relations here at Draganfly. We appreciate you all for joining us today. We will start as usual, with our with our CEO and President, Cameron Chell, discussing the first quarter operational highlights. From there, our CFO, Paul Sun, will discuss the financials and we’ll conclude with our Lead Director, Scott Larson, facilitating the Q&A portion. As always you’re welcome to reach out to me at anytime at investor.relations@draganfly.com. 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 two of this presentation, and I’d be happy to send that to anybody upon request. So Cam, please go ahead.

Cameron Chell: Great. Thanks, everybody. Appreciate everybody being here today and taking the time. First and foremost, I’d like to thank our employees and team members who’ve done an amazing job this last quarter on taking Draganfly to the next level on with all of our customers. Second of all, I’d really like to thank our customers and clients who have taken the time to believe in Draganfly and allow us to help them in their endeavours, and foremost, I’d like to thank our shareholders for your trust in what we’re building here. So I’m just going to do a screen share here to run through, oops, there we go. To run through our highlights for the last quarter. So a couple of things noteworthy what I’ve mentioned is that our revenue for the quarter was $1.899 million.

So just shy of $1.9 million, that’s $1.5 million in product revenue and $317,000 in services revenue for the quarter. That slightly down on the quarter on the services side, primarily due to resourcing as it relates to some additional build outs that we’re doing with our facilities. And certainly looking forward to our Q3 and Q4 results as our second plant comes on stream or our new plant in Saskatoon comes on stream here at the end of August. So thanks to all of our shareholders for your trust and belief and patience in allowing us to grow to this point where we’re helping ramp up production to meet demand. We had gross profit of $467,000. So that’s down slightly as a percentage, again, because we did a little bit less services and solutions revenue this quarter, which we expect to see quite significantly different in the coming quarters.

And then we have a cash balance at the end of the quarter of $6.7 million. So, we’re on budget and feeling quite confident about our performance in terms of what we’ve done. This is where we projected to be. And fortunately, we’re seeing the market react in a manner in terms of demand and us meeting that demand in a responsible manner as we had expected. Just a quick overview in terms of the drone industry and some of the changes and evolutions that we are seeing in the market today. Let me just hide that. And so, first of all, a big, big driver in this industry is the regulatory shift or evolution if you will. And so, again, we’re seeing a stronger and stronger move towards North American manufacturing, North American security and North American solutions for a number of reasons not just security, but also quality, quality control, supply chain, et cetera, et cetera.

And so, where we’re now at with Draganfly is that we have a manufacturer with two very well strategically positioned plants in North America, a brand new plant coming online at the end of August to join our new facility that became available at June. And so, what we did in the last quarter is basically we brought on our June, our facility in Burnaby. And then we’re able to take down the Saskatoon facility moving into our brand new building, our brand new facility expanded capabilities while our Burnaby facility was able to maintain where things are at and as Saskatoon comes up on stream basically, you know, significantly increasing well more than doubling or well beyond that our capacity and capabilities, as well as our additional features that we can now build into our products, we should see some grey scaling happening going forward.

But really important that these are North American managed controls, all the way from cyber right through to the actual manufacturing capabilities and processes that we’ve got really, really important to the customer base that we have. We’ve also seen as a key industry driver in this last quarter accelerate the FAA and Transport Canada streamlining regulatory environments for drone operations. It was about three years ago that the FAA in particular came out with new regulations around BD loss and that listen, there’s a lot of regulations within the drone industry, but BD loss, or SFOC and Canada, which is Certificate of Advanced operations, is, are really the key regulations that everything else kind of builds around. And we saw significant streamlining, both from the FAA and Transport Canada, in this regard.

And I think these are probably more significant than even the initial BD loss type regulation that was that was introduced about three years ago, which really started the industry rolling it on total merit. And so in that timeframe alone, we’ve already been authorised, or we’ve already been granted to SFOC for beyond visual line of sight and advanced air operations, which we’ll talk a little bit more later on, but really, really great to be able to see these things be able to be granted inside of a quarter, as opposed to, you know, at times where they can take six or nine months in the past. So advanced technologies are creating incredibly efficient business models. And we’re starting to see more and more of this. And so, the artificial intelligence and data analytics capabilities that we have, as well as our data solutions and storage facilities, are really, really starting to pay off in terms of inbound and our ability to differentiate between what we do in terms of just producing airframes, but actually providing total solutions.

And our Vital Intelligence product line is really been an example of this, in particular, in terms of artificial intelligence, and machine vision. So the adaptation to new markets by verticals, utilizing different drone types, I think it’s worthy to note that our medical supply delivery drones are first responder drones, and a great partnership that we had, that came to fruition over this last quarter after a year of hard work with promo drone, in terms of outdoor advertising with drones, which has really been effective, but also a dual use for public safety and emergency management. Drone adoption in the defense industries. It’s just staggering. That basically now everything from 5000 feet down, in terms of air dominance is all drone, it’s all small drone, it’s not even large predator, or Reaper type drone, it’s all small UAS.

And so, we’re very well positioned there. In terms of our product service lines and our experience, we’ve got active operations in Ukraine, we’re doing the mining work, surveillance work, and training as well, which is really putting us at the forefront on many, many areas in terms of, if you guys know how to train and fly in these areas in these environments, the experience that we get that then translates back into our product engineering and design and production, again, is really starting to bear fruit for us in our pipeline. So, I want to talk a little bit about our product and capabilities, because I do think this is a differentiator for us in the market in a very meaningful way. On the bottom left, you’ll basically see Toy Drones, right, bottom left corner, and those are consumer manually operated and fly by stick type drones.

And up at the far top right, those would be you know, fully automated military, artificial intelligence based type drones, but you can see, all of the work that we do tends to skew up into that area. And the drone industry in many respects is either about saving time, money or lives, one of those three things. And in order to do that you need industrial quality, automated artificial intelligence capabilities. And with a 25 years of experience and bench strength that we have, we’re very well positioned to be able to evolve with this market. And this is the market that will really see the inflection point happening over the course of the next year to make this industry, truly the multibillion dollar industry that that it has promised to be. What you’ll see there is in yellow, those are the systems that Draganfly employees have worked on.

The actual blue dots are systems that we’ve done contract engineering for with the primes, the defense contractors, and then the black dots. Those are actual drones, that and systems that that we manufacture. And you’ll see more and more of those black dots showing up over in that top right corner. And we had the distinct opportunity advantage to be able to be building our product lines, which I’m really excited about what’s coming out next quarter around customer demand. And that’s a big difference for us. We’re not building things on spec. And so we’ve been able to scale our operations, our production facilities and our product market fit exactly where the market needs to hit. It’s why we’ve been in business for 25 years. And why, previous to this last three years where there’s been a number of new drone entrants come into the market, every other North American drone company has gone out of business.

We’ve never tried to scale in the past. And this is the first time that we’re actually scaling up, because we have — we’ve seen the demand, we’ve got the capabilities, and it’s actual real a real market that’s developing here. So it’s an incredibly fruitful time to be in this space, and positioned where we’re at. So we’re very grateful for that. I’m talking specifically about the highlights of some of the products right now. On the far left side, you’ve heard us talk probably quite a bit about the heavy lift drone, which is a multi rotor VTOL, capable of carrying 30 kilograms, or over 70 pounds. And this has got unbelievable traction in the market right now. We have tools to be able to start to put this into production, we have been taking pre orders on it.

And then in the bottom left corner there, the commander, 3XL, this has really become our signature drone. It’s a Swiss Army knife of drones. It’s got dozens and dozens and dozens of payloads that fade on it from different manufacturers that we’ve already integrated with it. And I’ll talk a little bit more about some of the applications on it in just a second here. I did want to highlight our LiDAR system as well. And again, this is something that, we don’t just make airframes, we make total solutions. And this is a LiDAR system that previously given its weight and power, needed to fly on a helicopter. And so this is now a system that can fly actually all the way down to our 3XL drone. So the cost savings in using this LiDAR system is incredible.

The advantages it gives us over other organizations that are trying to fly LiDAR in terms of our services is really distinct and important to us, because it enables us to capture data and provide data analytics and storage back for our customers in a meaningful way. So while we sell this particular product out into the market, the real differentiator for us here is, this is a service differentiator where we can do certain missions that other organizations just simply can’t do. And we’re going to continue to work on those types of solutions. We’re very focused on what are the strategic differentiators for Draganfly and being able to do what we do and gives us that capability. At the end of the day the majority of the drone industry is about data, even though obviously things like delivery are incredibly important and a significant piece of it.

But the data in this industry really, will probably account for about 80% of the value that’s created. So we’re going to continue to skew towards data. But on the delivery side, I think it’s important to note that we just introduced two new payloads that we have engineered for the commander 3XL. Actually these will work on the heavy lifters as well. But one is the drop down winch system. So the drop down winch system has some incredible engineering capabilities, three metres of light five filigree kilograms of payload, it does have a precision camera on it so you can pinpoint exactly where you’re dropping down to count for wind, et cetera, et cetera. You can fly with this thing deployed as well. And then right below that, you’ll see our quick release box.

Now, the boxes that we have tended to focus on in the past and we’re seeing great demand, our four have been in the medical delivery side of it. So our differentiator there is that their thermal managed, and so we can deliver things like pharmaceuticals and vaccines and organs and blood and such incredibly important to our customer base. And the customer base that we’re catering to. This particular box is actually, I can winch down. It can also open on the front. It can also open on the bottom from an altitude. So it has bay doors on it and so it’s got a whole range of different multiple options. So if you get into weather conditions, or into tight spots where you can’t get landed or emergency situations or just typical delivery, you’ve got multiple options with precision surveillance and aiming camera on the base of this actual unit.

And then, coming right down to the middle there the starling X.2 drone This is a collaboration between Promo Drone and Jamar, the CEO and his team over there, they’ve just done an incredible job with this product. The 3XL was made to be able to carry this payload with the incredible battery capabilities and lift capabilities. So, originally, this was designed as an advertising platform. But there’s been tremendous demand in emergency management and services. And I think that’ll be their biggest market. So it fits in really well with what we’ve done. It’s been a great collaboration, and, and Promo Drone has been a fantastic customer for us. I know they’re taking pre orders on it already. They’ve got very strong demand. And of course, that translates very well to us selling more and more of this equipment, not just the 3XL.

So we’re very grateful to Promo Drone and the work that they’ve allowed us to do with them. Some operational highlights Dempsey, who is our very strong partner of ours over in Ukraine, we’ve expanded our joint venture with our joint UAV operations, excuse me, with them, and they are deeply involved in both the civil and the defense sectors. This now — we now have capabilities for increased inventory and repair and logistics within the country, which is incredibly important. So it’s one thing to be able to deliver drones and some sort of drone capability into the country. But when you look at — when larger orders are being adhered to, or asked for, the logistics now are really important. And just not logistics, but the training. So the amount of drone activity that’s happened over in theatre there has now started to lead to a maturing of standard operating procedures.

So but in the command and control structure, you actually know what drones you have, what capabilities they have. And up until this point, it’s been a hodgepodge of just whatever anybody can get into theatre, which makes it very difficult to do plan, strategy and a number of tactics. But what we see now was a maturing of this and that maturing really is viewing the purchasing decisions and the tactical decisions to organizations that can provide a consistent not just supply, but a consistent product that fits within a standard operating procedure that we now had the great fortune of being a part of helping design which we’ll talk a little bit more about here shortly. At the World Police and Fire Games, we were able to unveil our precision delivery system, the winching system and the box.

We’re a proud sponsor of the World Games. And we’re able to carry the closing ceremony flag and turn that over to Birmingham, Alabama, which the next World Police and Fire Games will be yes. We did receive a special flight operation for advanced operations and delivery over people in order to do that particular mission. It was a big success and really helped demonstrate to a number of our customers some of the additional capabilities that our winching system and delivery systems do have. So transport candidate did also grant us another SFOC for beyond visual line of sight operations above 400 feet for wildfire suppression operations. And we’ll talk more about that in the coming quarter. But that has been a big area of growth for the drone industry in particular, and we’re very proud to be a part of that.

And that’s all say at that about that at this point. The other thing I did want to mention that isn’t in the operational highlight, but isn’t our press releases is the deal that we have done with HEAL-Corp and the Ukrainian National Academy of Internal Affairs. So the MOI, is the organization that is much larger than the MOD as a matter of fact, in the Ukraine, and the MOI oversees everything from the National Guard, certain aspects of presidential guard, special forces, emergency services, police, border patrol, et cetera, et cetera. So, we’re training up to 1000 new pilots per year with them on Draganfly equipment, and Draganfly payloads. And the big, so obviously great exposure for Draganfly and the whole procurement process. But really, what’s important there is this.

The best drone pilots in the world right now in Ukraine. We’re not going to be teaching anybody how to fly better sticker or operations over there. But what is important about this is it’s a formalized system to develop curriculum around standard operating procedures, which gives us incredible insight into how to design our product for that particular theatre and/or other theatres that are similar to it. We’ve already seen this type of experience bode very well for us in our pipeline, as it relates to incoming sales. Nobody, again, wants to be putting equipment on scale into any type of theatre unless they unless they know the capabilities, and there’s a standard operating procedure for all of the assets they’ve got in that particular environment.

And they know how they can deploy them, repair them, and what operational capabilities they have. These are a lot of the things that when you think about the drone industry, you think, oh, who can lift more or who can have longer battery life or those types of things, but it’s really more about how do you integrate operationally so that you can have successful data collection or delivery. So again, super, super proud of our teams, in particular in Ukraine, who have been going above and beyond in order to serve their cause. I touched on this slightly already, but obviously, our production capacity, which has been next to sales, well, in fact, in front of sales, this has been our focus. So as mentioned before, we brought Burnaby on in June, we slowed down Saskatoon, we have a brand new facility, that’s very close to being operational.

And as that becomes operational, we’re going to be able to meet demand. And I think we’re looking for some pretty nice results in the coming quarters due to that. Like I say, we do have very good revenue visibility at this point. And so, tough strategic decision not to push the numbers harder sooner, but very, very pleased what that means in terms of how we’ll be able to scale. What I’d like to do now is turn it over to Paul Sun, our CFO to review the financial results. Paul?

Paul Sun: Thanks, Cam. Thanks, everyone, for joining. So, we’ll look at Q2 here as a year-over-year comparison on slide nine here. Revenue for the second quarter was down 19.8% to $1.9 million from the $2.37 million in the second quarter of last year. Second quarter revenue, as Cam mentioned at the outset, comprised of $1.58 million from product sales with the balance coming from drilling services. So the reduction is due primarily to lower provision of services this quarter versus a year ago. Also, we touched on gross profit $467, that would have otherwise been 590 excluding one time non cash write-down and inventory. Gross Margin as a percentage of revenue would have been 31.1%, down 11.7% from Q2 of last year. Again, this was a result of more sales coming from products that generally tend to have a lower margin than that of services.

Total comprehensive loss for the quarter, $6.9 million compared to a comprehensive income of $640,000 in the same quarter of last year. This quarter includes as mentioned a non-cash charge of a write-down of inventory of about $122,000 and otherwise would be comprehensive loss of $6.76 million. However, in the same quarter of last year, the income had a gain in fair value of derivative liability of $6.1 million. So it would otherwise have been a comprehensive loss of $5.45 million. So the year-over-year increase in loss is primarily due to the decreased gross profit that we talked about and slightly higher SG&A. Now on slide 10, we looked at the quarter again, but since we just went through the year- over-year changes for the quarter here we’ll focus on the quarter-over-quarter changes between this quarter meaning Q2 and that of Q1 of 2023.

So revenue for Q2 increased by 19% to $1.9 million compared to the $1.6 million, that was done in Q1 of this year, due to both higher product and sales and services. Gross margin percentage for Q2, again was 24.6% due to that inventory write-down that we talked about and otherwise would have been 31.1% compared to 27.7% in Q1 of this year. So hence on an adjusted basis, gross margin would have been up 3.4% quarter-over-quarter, and this increase is due to the sales mix of the products sold. Total comprehensive loss for Q2, again was $6.9 million. This compares to a comprehensive loss of $7.1 million in Q1 of this year. And again, recall that we had the non cash write-down of the inventory. If that was axed out it would be $6.76 million while in Q1, there was a small non-cash gain of a fair value of derivative liability of $57,000 and the non-cash write-down of inventory of 77.

So excluding that Q1’s 2023 loss would have been pretty much unchanged at $7.1 million. So our loss this quarter was actually a bit better primarily due to higher revenues, quarter-over-quarter. On the next slide, slide 11, you can see our total assets decreased from $14.6 million at the end of last year to $12.7 million, which is just largely due to the use of cash. Working capital surplus at the end of this quarter was $7.5 million versus $10.1 million at the end of 2022. Again, primarily for the same reason, we do continue to have minimal debt. And our balance sheet shows cash at the end of June at $6.7 million. And we compare that to $7.8 million at the end of last year, December 31, 2022. And with that, I’ll pass it back to you, Cam,

Cameron Chell: Thanks so much, Paul. Appreciate it. I think we’ve got a number of questions that either came in ahead of time or have been popping up. So maybe Scott, I will turn it over to you.

A – Scott Larson: Yes, thanks. We do have a number of questions that keep coming in. I have had a few questions and emails, just kind of come in over the course of the last few minutes as well. So, I’ll kind of organize these as best as I can. And as more questions come in, feel free to send them through. So, Cam, talk a little bit about incremental sales demand, where that’s coming from with regards to geography as well as sector? Are the new sectors open up, you talked a little about high level product versus services, but maybe give little more granular if you can with regards to geography, and overall sectors?

Q&A Session

Cameron Chell: Yes. So, geography is still a bit surprising, at least to me. And it shouldn’t be because it’s been a — it’s been a solid year, year and a half of seeing this trend, but international is much more strong than what I anticipated it to be. But interestingly enough, it’s still in demand for North American products. So it’s almost as if the foreign national manufacturing concerns that are in North America or even heightened in other areas of the world and there tends to be less regulation in those in those areas. So the markets are moving quite fast in that regard, that’s surprising to me. In particular, the Ukraine theater is an incredible market. You need to be very, very smart or experienced, excuse me, in order to participate there and understand how that will scale.

And, I think we’ve paid some dues there to do that. And I think we’re in a good position for what’s about to unfold. That said, also, it provides us incredible credibility back in the North American front, in particular on the defense market, knowing that we’ve got that experience, and we’ve got equipment in theater over there doing that type of work, and we’re able to bring back expertise and share it around our equipment and solutions that’s being cornered by our customers here in North America. The Indian market is probably the one that has surprised me the most other than Ukraine kind of came out of the blue if you will, for everybody. But the Indian market is something where, the foreign national drones are just completely off limits. And the demand for a North American technology manufactured in that environment is massive, it’s I would hazard to say, it’s likely the biggest drone market in the world and opportunity in the world, which I wouldn’t have concurred with based on experience two years ago.

So, we just recently came back from another Trade Show over there. We’ve got some great partners, we’ve got some very deep inroads with the government. We’ve had first product land over there. And a number of members of the team have done significant learnings around how to set up our operations. And, and I look forward to that in the coming quarters. So, India is big, defense is very big. And we see the public safety market here in North America leading the way in terms of regulatory approval. So, while there are other markets that may be bigger than public safety on the industrial side, there aren’t other markets that will get regulatory approval or adoption quicker than public safety. So things like drone as a first responder of drone in a box for first responders and public safety.

Those are the areas that we’re focused on because we know those the areas that will get approvals, waivers, et cetera. And budgets, there’s ROI on it. So there’s budgets that are being allocated for those now. The other industrial applications, for sure are coming along and we’ve got great sales pipeline into those. Where we’re not — where we remain not overly focused, for us, is things like consumer delivery? We just — they’re a long way out. And then, we’ll see where they end up. I mean, they’re a reality, they’ll happen, but they’re not — they’re not a short term focus for us at all. Hopefully, that provides some insight.

Scott Larson: Talk a little about the supply chain issues, we’ve talked about some of the last quarters, they’ve been, obviously supply chain issues that have affected in this industry, among, among lots of others. What are your thoughts on that moving forward?

Cameron Chell: Yes. So I think, supply chain has been an issue for most people, you know, COVID was a part of that, for sure. But then coming into a market where you’ve got a complete vacuum of drones, foreign nationals being taken out of North American market, and many of the other markets, and then competition for and then, competition to get product in and specifications being designed and built for an entire new product evolution, or entire new generation of drones and capabilities. We’ve been dealing not just the supply chain, but reviewing the specification, you know, kind of freeze is like, oh my gosh, like, there’s so many new things that need to be put in to this next generation of drones, which are now there. So real time delivery, is something that, you know, through our ERP that we put in place a little over a year ago is something that we’re capable of.

However, we are skewing a bit more out of necessity to some bigger inventories, just because we, we, we have that demand there, and we don’t want to necessarily be risking the supply chain. So some of that has had some effect on us as well. But what it will do is hopefully prevent us from having things move out to the right, on a continual basis, which has been, you know, the entire industry has been plagued by that. So the new facilities we put in place are addressing that, you know, believe it or not, things like storage, and how you set up your production lines, and next, et cetera, are all really important to be able to carry inventory, but not too much inventory, but still be able to, to adjust quickly to just in time inventory when it’s applicable.

So, it’s all kind of a maturing process right now, in an industry that’s been around for a while, but it’s frankly, brand new.

Scott Larson: Do the regulations around drones from China effect what we’re doing here at Draganfly?

Cameron Chell: 100% they do. Yes, I mean, it’s — our position to Draganfly is that we provide solutions for customers. So there is a significant market for national drones in North America, and there will be, and it will continue to be. And they’re fantastic equipment. So, we’re not being naive to think that, we’re going to go into the small drone market. And the opportunity here, there is significant vacuum created, and market demand by that reality and make some valid concerns around those four national drones. But the market that we’re catering to and building towards, right, given total solutions and operating procedure capabilities, is not about — we’re not trying to — the opportunity is massive, maybe because of that foreign national conundrum.

But that’s not going to be a sustainable story. What you need to do is build better drones with better capabilities fit for specific operations. And that’s why you see our drone skewing to very specific operations and/or to a heavier lift type of category. So this is stuff that’s really we’re focusing on where the market is not necessarily just because the opportunity is here, because of regulation, because those could change in 10 years from now, as well. But, yes, so it has a huge effect on us. But that’s not what we’re counting on. I’m not sure if that was the question you’re answering — asking. But we’re not counting on regulation to build a sustainable business.

Scott Larson: Yes, I think that does answer the question. And other questions that have come in, about production capacity, which I think we’ve answered ongoing things in Ukraine. We’ve talked a little bit about windfall geotech in the past. Any update on that relationship? What does that look like? How does that affect some of the stuff we’re doing in Ukraine as well?

Cameron Chell: Yes. So the relationship there, very solid going forward. I love the technology bench that we’ve been able to collaborate with there on de-mining side, as well as the earth mining, rare earth mining side with them, and an important partner as we move forward, relating to our total solutions business, or our data business in particular on the earth mining side, the rare mineral side, if you will. And then the technical collaboration for de-mining going forward. We’ve taken a very pragmatic approach, in particular, in Ukraine to de-mining. There’s been a number of companies that went in there and make wild claims about what they could do, how they could do it, what their technology was about. How AI was going to — and it kind of reminded me of the last two drones cycles where it was like, all these companies just made wild claims — they knew they just couldn’t meet.

And sure enough to win pretty much all of those, not all, but most of those de-mining claims have now been debunked in the pragmatic approach that we’ve taken with building algorithms, working with multiple sensors, not one magic sensor that does everything or can provide immediate real time results and solve every solution and de-mining field intendant like just those types of things. And now we see the inbound pipeline on de-mining, not just in Ukraine, but around the world going up significantly, because we’ve established ourselves as a credible player in that market. So yes, so anyway, that all related to windfall, and we’re glad to be working with him.

Scott Larson: Talked to the past recently about acquisitions and opportunities and some of the consolidation is going on in the industry, do we still see that happening? Anything that have come [Indiscernible]?

Cameron Chell: There’s significant consolidation opportunities now in the industry more than we’ve ever as you would know, Scott, more than we’ve ever seen, a better pricing that we’ve ever seen before. But kind of the reality for us is, it has to be pretty special. Now, for us to take it on. Especially given where we’re at with our production capability about to core here at the end of August. And we’ve looked at lots. There are a couple that are still pretty interesting. And so we’re going down that path of those paths. But for the most part, we can build a lot less expensively than we can buy, even at the discounted prices now. And at the end of the day, you’ve also got a — you’ve got to integrate different cultures. And it’s a very, very difficult game, if you want to build a scale business as most people know.

So, there’s a couple of interesting things out there, and I don’t want to discount those, because they are pretty interesting. But for the most part, acquisitions at this point, just don’t, like organic growth is what’s going to be the ticket for us.

Scott Larson: Without getting too far ahead of ourselves, Draganfly has announced a couple of new products in the last six, eight months, of course, LiDAR heavy lift and so forth. Anything else coming down the pipeline? How much effort is Draganfly putting into new product development?

Cameron Chell: Well, we’re really excited for September, the product teams led by our CFO, Paul Mullen, I think have knocked it out of the park. And in September, there will be a new significance, two new significant product announcements, in terms of our drones, what they’ll do, capabilities, lift capability, duration, entire new category, and it completely driven by demand. So these are drones that are building on the industrial strength type of drones that we have today. And where our customers that are now lining up in size or saying, hey, if you did this, this is the size of order we’ll make. And so, we’ve done that, and it’s just killing me not to say what it is, but there’s but there’s some really great stuff coming in, I’m really just incredibly impressed and proud of the team.

Also in terms of payloads of our existing platforms, which is really what the Draganfly product line is becoming is expanding greatly as well. So we have done as mentioned our winching system with a precision camera on it, which is really important with some incredible engineering behind it in terms of capacity to fly, half winch, length, payload capacity, the boxes with multiple remote opening doors in different directions. But also our partners who are now building product to fit onto the Draganfly. And probably our most significant or some of our most significant pipeline opportunities now were brought in by our partners from previous announcements, where they’re all selling you their software, their payloads, and they’re going and they’re like the 3XL in particular right now is the best platform for it.

And we’ve done very, very concise work integrating with those payloads. Promo Drone is one of multiple examples. And so, we’ll see those things coming down the pipe in this coming through as well. UAV which is a significant drone show in September will be a pretty monumental event for us. We also have a very large customer event for us happening in September at our Air Facility in Texas, where we’ve got a couple dozen customers that are coming out and flying for a few days and, and taking delivery of equipment and starting training and also seeing some of the new product lines that they’ve asked for coming down the pipe as well. So there’s just a whole maturing of how we’re able to bring products to market.

Scott Larson: I think there’s been a couple of other questions that have come in that probably kind of put touch on a guidance, which of course, we don’t gave, we don’t want to talk about revenue numbers for the next three to six months, we’ll probably stay away from those other than what you’ve already talked about. I think that kind of wraps up the questions that have come in either answered with regards to the presentation that Paul gave some of the stuff that you’ve talked about. So with regards to questions, that’s — there’s been one or two that have come in over the chat, we’ve answered those emails as well. So I think with that said and done, I’ll be happy to pass it back to you Cam, and we can wrap it up here.

Cameron Chell: Sounds great. This is just — I’ll just wrap up quickly. First of all, again, saying thank you to the team members, everybody, the culture that you’ve created, the work that we’re doing around the world, the commitment, the passion, the weekends, the late nights, it just, it’s incredible. And thank you for that work as a shareholder and as part of management to get to be a part of it. Certainly to our customers, who and our partners who are building payloads and entrusting us to work with their customers, please continue to give us that feedback and let us be of service to you and to our shareholders. This is an industry story. And I kind of liken it to playing golf. You can go out and you can do your best to shoot a good round, and get whatever score you can.

But the reality is you can also go in and shoot around to become a better golfer. And so for the last two years, previous to us going public on NASDAQ, it was all about how to learn the industry and sustain within the industry and just survive in the industry, because it just never really came to fruition. And since those BD loss regulations have started to become a reality. The industry is now starting to mature to a point. But if you want to be that number one or two player in the space, at least our strategy is, you don’t go out to play a better golf game, you got to be a better player until that market has matured. And we’re starting to see that happen. So we really appreciate your patience in terms of being able to see a real market mature, the next generation of drones come to fruition which I think the 3XL is the leading edge of that.

And then some of the things that we’ll see at UAV this year, which are put out there because of customer demand. And we appreciate your trust and hopefully you’ll see the commitment that we’re all making to you. So thank you very much, and we look forward to a fantastic Q3.