All right. I think to be respectful of everyone's time, I think we will get started just as people are still starting to file in. So as always, welcome and greetings to all the shareholders and stakeholders who always tend to join us on these calls. This time is the Dragonfly 2026 Q2 earnings call. My name is Roley Bustos. I'm the Internal Investor Relations Rep here at Dragonfly. We appreciate you all joining us as always. We'll start with our CEO and President, Cameron Chell. He'll be talking about and recapping the second quarter. Next up will be a detailed financial review with our CFO, Paul Sun. We'll then conclude by addressing the pre-submitted questions we've received. As always, you're welcome to reach out to me directly, investor.relations at dragonfly.com, if we didn't get to your question today. I remind everyone 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 10, 2026. were under no obligation to update or renew these statements outside of material press release disclosure going forward. The full forward look and disclaimer can be found on page two of this presentation and on the screen right now. Cam, if you're ready, please go ahead.

Sounds great. Thanks, Roley. Sure appreciate it and appreciate everybody taking the time to afford us the opportunity to update our earnings call for this last quarter. The net-net here is that Dragonfly, we had a record quarter in our second quarter and really very pleased with the progress that we are moving forward with. It's super pragmatic. I understand that it's a very pragmatic approach compared to maybe, say, a number of other comps out in the industry. But we're super pleased with where we've ended up and what the pipeline looks like going forward. So our revenue was $2.664 million. That's a year-over-year increase of about 26%. We had a gross profit of $533,000-plus. We have a current cash balance of $131 million, and we did just over $2.5 million of product sales. Some of the highlights from the last quarter included IACLEA, which is the International Association of Campus Law Enforcement Association, or officials, professionals. This is a 3,000-strong campus association, and they signed an exclusive deal with Dragonfly to provide their association members, the 3,000 campuses that are a part of this, with the training for drones and counter drones. Paul Mullen, Deborah Greenberg Cameron Chell, Paul Mullen, Deborah Greenberg Paul Mullen, Deborah Greenberg Paul Mullen, Deborah Greenberg and we're rolling out the first three campuses that have signed up with us in the next quarter. We'll assess those three campuses. We'll probably run them. We'll sign up another three of the 50 that are indicative in the pipe. and we'll run them for a quarter, then run the next ones for a quarter and get all that operational expertise, make the adjustments necessary and then we'll open up this ticket to it in probably the second quarter of next year, which works well in terms of most of the budget timing and actually most of the decision timing that it takes for things to move forward. But we really want to make sure that we've got a great reference base in this regard because it's a bit of a captured market for us. So, Really hats off to our public safety organization and how they organized this. I will mention as a subsequent event, we also did sign the Small and Rural Association and a very, very important association for us to sign as well. And part of our whole strategy here is not necessarily to go after the urban centers. So those urban centers are really well serviced by organizations like Skydio, Axion, Brink, who are very, very targeted in those areas, have obviously very strong balance sheets, competent management teams. And we didn't want to be going head to head with those folks. Now, The campuses is a terrific set of organizations for us to go and work with, including the release of our grown-in-a-box solution to them. However, the rural, which makes up about 80% of police forces in the country, but they're smaller. So they're a little bit more expensive to work with, but they're not quite as fussy. So you've kind of got a balance there to work with. There are a couple of other associations that we're close to signing. But again, we're trying to roll it out in a measured way. We also completed the acquisition of Skip Dynamics. Now, this is a really strategic acquisition for us. Skip Dynamics, the two founders involved here are former Navy grads. They're actually the individuals that designed the original FPVs for the Marines and over 15 years ago, trained Marines and built protocol around FPVs. Now, a lot of people don't know this, but FPVs weren't invented in Ukraine. They were introduced to Ukraine by the U.S. Marines as a bit of a Hail Mary to like, you know, You guys are in a tough spot. Try this. And lo and behold, it worked. So the amount of experience that these two individuals brought to the organization, not just in terms of their engineering prowess capability, operational prowess, but also their contacts in the existing work that they do within the government, it was really important. Now, this particular product that you see in the picture there, that is initially designed as a one-way attributable fixed wing drone. So part of the strategy here is twofold, and we see it unfolding exactly as these guys had predicted. There's two reasons that fixed wings will become much, much more prevalent today. over the coming couple of years. First of all, if there's engagement in Taiwan or the South Pacific, you're dealing with a surface area, an ocean that's five times the size of the Atlantic. Distance matters, and you're not going to be using quadcopters in those types of engagements. And it will basically be a naval or marine or beachfront type of engagement. So you need a different type of piece of equipment. And this is positioning us for that spend that's coming up in that regard. It is our estimation that the 100 nautical mile Lucas program, this is exactly what this is targeted toward. And we're down to the final few contestants or selections for that. And we feel pretty good about it. Now, interestingly enough, this particular plane is also an excellent ISR. It could be hand-thrown. Paul Mullen, Deborah Greenberg Very, very low cost, like four-figure costs. And that's really important. And they're completely customizable inside. So depending on the type of radio that you want to run or the type of payload that you want to have or ordinance or such. So it's very, very modular as well. So it really fits our... are our philosophy of modular drones. Dragonfly was very proud to be awarded by DEVCOM or a counter drone development of a counter drone system. This is an ultra light, ultra mobile counter drone system. Cameron Chell, Paul Mullen, Deborah Greenberg and a factor that can be either kinetic or RF and some pretty sophisticated software on the tracking side. So we're really excited about what's happening there and how that's – I mean, we've got strong experience in the counter-drone space, but winning this dev group contract is significant and I believe translates into hundreds of millions of dollars of revenue, not just within – Paul Mullen, Deborah Greenberg but packed in a case and container that is much more durable. And the optics on it are incredible compared to what you would get in a prosumer or in a dual use type drone. And this is a bit of a trend that we see in the defense side of the business where you see the quality of the product, even if it's dual use, moving up the food chain. And I would suggest this is also a reason that we continue to see a slight, a meaningful delay in our revenue ramp because the specifications and qualifications that are being asked for are being refined on the fly. So we may have A large order. And then as the order gets there, like, hey, can you make this tweak? And then you've got to redesign some cameras. And candidly, this is why we worked in partnership to develop this entire camera system. It's very unique to Dragonfly. It will fit on any of our models. It'll also fit onto other drone models as well. and really launches us into the optics business. Dragonfly, the Flex, the FPV drone was selected by two additional U.S. Department of War units. I can tell you that these are all Special Forces units and we're really proud of the fact and pleased with the fact that these particular Special Forces units are selecting the Flex drone. There's a couple of primary reasons, a couple we can't really talk about, but I but a couple of them that are disposable is in particular that you've got arms and blades that you can switch out. So what that means is that you've got variability in your mission profile without having to carry a whole bunch more equipment. Cameron Chell, Paul Mullen, Deborah Greenberg Paul Mullen, Deborah Greenberg you know speed and maneuverability is marginal between any of them but because you can put some bigger blades on this even with shorter arms you actually can do some bigger payloads some more sophisticated radios some of these are actually being used in live situations right now even as ISR drones so some great lessons that have come out of that we see a great future for this particular one ACSL and Dragonfly have partnered to bring NDAA-compliant Japanese drones into the Canadian and actually into the U.S. market as well. But into the Canadian market, it's exclusive. But into both of these markets, it's important to note that these are not just typical ACS drones. are in our lineup because we've integrated them with our other drones. So you'll see on the front of the ACSL drone, a camera system that pops off and another camera that can pop on, whether it be a thermal or a higher res or Hyper Spectral or whatever the case may be. There's four different cameras. But those cameras now also pop off and are being fitted onto the Apex drone and eventually onto all of the drones. So we'll have an interchangeable camera system that will be included in the ASL line. Now, only Dragonfly will have that interchangeable capability with ASL. So we're building strategic differentiators into this particular product line. Paul Mullen, Deborah Greenberg utilize valuable resources to develop a Me Too type product. And I'm not suggesting ACL is a Me Too or that companies in Me Too, they've done some really, really cool things here, but this is all they do. You really have to just be focused in that particular product line if you're going to be even somewhat successful. And of course, our product line tends to be one, first of all, interchangeable, modular. We, you know, arguably we're still the only folks out there that have a fully integrated product line across six different drone sets. So if you're a squad, a company, a battalion, a brigade, you've got all the different drone sections that you can pick from from one supplier. We supply everybody from a squad right up to brigade. We don't go up to command level because those are typically drones that are category three. drones. But interestingly enough, the biggest demand that signal that we see over the next couple of years is going to be medium and long range strike drones. And hence, that's exactly why we bought the expertise and technology behind skip dynamics. So you will see us entering into at least the medium strike and likely the long strike area over the next number of years as well. Cameron Chell, Paul Mullen, Deborah Greenberg The procurement cycles. One, to help industrialize the military complex in Canada, but two, to help ensure that they are able to get the equipment they need in the timeframe they need because everything is sped up. Now, it's interesting because Canada has also, in many respects, become a leading voice and a leading industrial nation, even within the European pact. So much of that testimony was applied over into NATO. It was invited also by the prime minister's office to attend the NATO summit in Turkey, along with six other countries. are all Canadian Defence Executives. And it was probably one of the most productive and insightful trips that I've ever had the pleasure of being on with direct contact with multiple world leaders talking specifically about procurement cycles, where we're at in the growing space, what are the things that we need to do to be effective long-term. Not an exporter, but what do we need to do to build a successful long-term industrial base? Paul Mullen, Deborah Greenberg, Paul Mullen, Deborah Greenberg, will see a significant bulge in it because we've had to remain measured in order to meet that demand on a timeline that's going to be required of us. So again, we've worked ourselves into a very privileged situation to be able to serve the people that serve, and we're hopefully going to be able to do the job that's being asked of us. At this point, I'm going to turn it over to our CFO, Paul Sun, to run through the financial highlights. Paul?

Yeah, thanks, Cam. Thanks, everyone, for joining. So, yeah, this first slide here, we'll look at a snapshot of second quarter, comparing it to the year-over-year quarter last year. So revenue, as Cam mentioned, 26% up to $2.7 million from $2.1 million in the second quarter of 2025. Second quarter revenue comprised up $2.6 million in product sales with $100,000 worth of balance coming from drone services. Gross profit $533.1 thousand compared to $5.04 and Q2 of last year. We did have a one-time non-cash write-down of inventory of $43.7 thousand and otherwise would have been $576.8 thousand compared to the same period last year. Paul Mullen, Deborah Greenberg Total comprehensive loss for the quarter was $11.8 million compared to a loss of $4.7 million in the same period last year. This quarter does include that non-cash write-down of inventory of the $43.7 million and a small fair value of derivative liability loss of $8.9 million. Paul Mullen, Increase is primarily due to higher office and admin costs, R&D, share based comp, professional fees, travel and wages. And we'll go to the next slide, please, to do a quarter over quarter change. Looks good. Yeah, so revenue for Q2 was up 15.2% to 2.7% again, compared to the 2.3 million for Q1 of this year in 26, mainly due to higher product sales. Gross margin for Q2 was 20% compared to 15% in Q1 of 26. However, if we back out that one-time inventory write-down that I mentioned before, gross margin for Q2 would have been 21.7%. Thank you very much. 43.7 thousand. So Q2 would have been 11.7 compared to a loss of 6.6 million excluding non-cash adjustments in Q1 of this year. Again, increase in quarter over quarter was primarily due to the same factors being high office and admin costs, R&D, share issuance costs, professional fees, travel and wages as the company continues to scale as per Cam's earlier comments. Moving to the last financial slide here, I think we got a snapshot of the balance sheet. So you can see total assets increased from $101.3 to $154 million from the end of the year, largely due to the increase in cash. You recall we did do a relatively large financing in February of this year. The working capital surplus as at June 30th was $144 million versus $95.2 million from the end of 2025. Shareholder equity was $148.9 million at quarter end compared to $96.6 million at the end of last year. However, both working capital and shareholders equity would have been a little bit higher if we X'd out those non-cash fair value of derivative liability that I mentioned earlier. for the quarter, as well as at year end. You can see we continue to have minimal debt and our cash balance at the end of this quarter was $131.9 million compared to $90.2 million at the end of 25. As again, we did that February financing. And with that, I'll pass it back to you, Kim.

Great. Thank you, Paul. Appreciate it. Just a super quick review. This is our core line here, along with two additional, actually three additional products. So we've got the Flex FPV, the Apex, the Commander, the Heavylift drone. That Heavylift also comes in a hybrid called the Outrider, which is up to seven-hour flight time with a 67-kilogram payload capacity. And Paul Mullen, Deborah Greenberg and then, of course, we've got the SOTEN, which is unique with the modifications that we've made and integrations we've done. That is a unique product for us. You will continue to see product rollout from us over the coming quarters as well. I shouldn't say more than that, but pretty excited about the things that are being driven by customer demand and where we're positioning those things from both our military and in particular public safety customers. So there are a number of questions that came in that Roli provided to me. So I'm just going to read them here, if that's okay, and do my best to answer them. So could you discuss Dragonfly strategy in the current UAS, counter UAS market? Is Dragonfly developing its own counter UAS system, or do you expect these capabilities to be delivered primarily through strategic partnerships and integrations? So great question. And I think one of the advantages that we have or one of the strengths that we have is the fact that we've been building drones for 27 years. We understand the vulnerabilities of them extremely well. And we were doing counter drone work 15 years ago. Well, it was 12 years ago. We built a drone that shot nets out using airbag explosives under contract for Arrow Environment, who was a big customer of ours at that time. And we've seen many, many progressions and one-offs that we've built for different programs out there. So we are developing our counter drone capabilities. We have purposely not been tried to be first to market in this regard because it is like the UAS space, a very fast moving, continually changing space. more because tactics from aggressors can change so quickly. And because it's such a nascent industry, the concepts of operations and the use cases all change super quickly. So we're definitely an innovative company. We don't try to be first movers, but we definitely take the time to do the research and be very innovative so that when we are coming out with stuff, it works and can be really well deployed. So our counter drone strategy is being able to have certain specific capabilities that are unique, but that can also be applied into existing product out there so that we want to be able to use the existing well-established counter drone companies to be able to be channel partners of ours. We've been very fortunate and won the Deb Group contract in order to build an ultralight, ultramobile counter-drone system for the Department of War, which is a massive opportunity for us. As I mentioned before, hundreds of millions of dollars over the coming years is the potential, and it's certainly on track. There are a couple of partners in there. There's a tether company that's in there that we've partnered with. in order to provide some of the unique capabilities of the system that we did propose. But for the most part, the hardcore IP underneath the tracking system, how everything integrates together, the fact that it's modular, it can use multiple types of effectors, whether that be kinetic, soft kinetic, low collateral, RF, whatever the case is. is entirely unique to us. So the short answer is we're developing our counter drone capabilities. It will have proprietary aspects to it, but we're certainly not afraid of partnering or purchasing or joint venturing. What we really care about is providing the greatest amount of safety to the people that we serve. And that's the approach that we'll continue to take on that. Do we think anything will come of our attending the NATO summit? The NATO summit was one of the most fascinating experiences. I've been to NATO summits before, not invited in at this level, for sure, and certainly not maybe in times that are as unpredictable as they are right now with the types of budgets that are going into NATO-type countries. We will undoubtedly see more than significant results from this NATO Summit and the ongoing data participation that we will have and the unique position that Canada presents within NATO as being a North American company, but a part of the European Defence Pact and really having a leadership position there. So our international business, We're very, very fortunate that we have manufacturing in Canada and the United States and representation in both countries, all the way up to a board level, about 85% plus of our shareholders are U.S. citizens. However, because of the domicile of Canada and what that affords us is the ability to have some really nice open doors, not just within NATO, but also within many Latin American, many Asian countries. and many Eastern Bloc countries. So we see a tremendous amount of opportunity in those markets and we see very strong support from the Canadian government in order to supply and both for geopolitical but also for economic reasons, we're getting some great support in that regard. So we'll really start ramping up our capabilities within that regard. So it was a fantastic trip and incredible learning for all of us. is Canada going to be an important revenue source for us? Can we expect contracts to be announced? The answer to both of those is yes. We never planned in our original business plan that Canada would be an overwhelming, almost even material revenue source for us. It's really turning out to be quite the opposite. One, the budgets are very significant. It's the 10th or 11th largest economy in the world that's literally deploying tens and tens of billions of dollars over very short periods of time with the best talent that they've got in order to have these capabilities. You know, some very unique things about Canada is a massive coastline, so marine is becoming a specialty for us. Arctic, without question, is becoming a specialty for us, and Canada really wants to position itself as an Arctic expertise. And it is, you know, geographically a big part of their responsibility, whether it be NORAD or their own sovereignty. So, yeah, so it's, pleasantly it is. Now, that said, I don't want to take away for one second our commitment to the United States. We have facilities in Florida. We have additional facilities that will be very large facilities that will be stood up before the end of the year this year along with personnel to meet the demand that is there. And I know there's that question, well, if the demand is there, why don't the numbers show it? And it's intricate. Paul Mullen, Deborah Greenberg Paul Mullen, Deborah Greenberg being a complete mover is the most important thing to us. So buyers are becoming much more discerning very quickly. And so it's, you know, over the last number of years of education, you know, something that flew, you know, could be sold. However, that is not the case anymore. And so they want to have these integrated systems to provide and execute on integrated missions, whether that's public safety, military, or frankly, even industrial. So we've seen an impact from Skip Dynamics. Had we seen an impact from the Skip Dynamics acquisition? Yeah. Yeah, the impact certainly isn't on the revenue side, but that wasn't the objective. The objective here was the talent acquisition. both from a pure intellect standpoint, also from an integrity standpoint, and also from a contact standpoint. And it was the technology itself. We are thrilled around the thermoplastic technology, which reduces the weight and the cost and the scalability of these things. It's just... It's like nothing else I've seen out there. So that is a really, really important aspect of why we... And so we've seen a big impact and we're going to see very sizable orders because of it. And orders not just in the particular orca or dolphin product lines, but also the learnings that have been applied, are being applied, excuse me, into the other areas of our product line. So... What has been the feedback and initial interest in the drone programs from ICLEA? Do we have an idea of what kind of revenue that these partnerships will bring? So the small and also the small rural Sierra Leone. that represents 80% of the police forces in the United States. It's just that simple. It's just not something... We're just trying to be where other people aren't, number one, and aren't thinking are important. Now, the use cases in some of those areas are different than pure urban areas, but they lend themselves to the type of work that we have traditionally done. Traditionally, our drones have been a bit bigger. Paul Mullen, Deborah Greenberg So, you know, so those are the types of things that we're looking at. And we think it's going to have a very big impact is, like I say, it's 80% of the police forces out there fit into that category that I wouldn't say we've got locked up. That would be, but we got to strangle, hold on. And hopefully we'll be able to provide the right type of service to continue to earn that position. Yeah. As Roli mentioned, we are available as much as possible and reasonable to answer any questions. We appreciate everybody's time and thank you for the consideration that you've given us today.