All right. I think to be respectful of everyone's time and to get started in a timely manner, I think we'll get going here. So as always, greetings and welcome to all of our shareholders, stakeholders, partners, customers who are on today's Dragonfly 2026 Q3 earnings call. As always, my name is Roley Bustos. I am the internal investor relations representative here at Dragonfly. We appreciate you joining us. As usual, we'll start with our CEO and President Cameron Chell recapping our third quarter. Next will be a more detailed financial review with our CFO, Paul Sun. We will then conclude by addressing some of the pre-submitted questions we've received. Remember, you're all welcome to reach out to me separately, investor.relations at dragonfly.com, in case we didn't get to your question today. As always, 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, November 10, 2026. 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 the presentation and on the screen right now. Cam, if you're ready, please go ahead.

Great. Thanks, Roli. Welcome, everybody. It's a pleasure to be here for our Q3 update. Revenue for Q3 was $2,048,425, which represents a slight decrease over last year, which we'll explain here over the next short bit. We had gross profit of $128,000. That's gross margin of 6.3%, also squeezed, but we'll explain specifically why here shortly. We have a cash balance of over $128 million. And overall, it was a really exciting quarter for us. Surprising in many ways, not from a sales standpoint, but actually from the amount of work that we've got going forward and the result because of some of the decisions we made in Q2 and Q3. So some operational highlights just to let everybody know is that basically we had one of the things that was really exciting for us is standing up of Dragonfly Defense USA. And in doing so, we hired our president of Dragonfly Defense USA. Greenberg, retired Brigadier General A.J. Peshawin from U.S. Marines. A.J. was acquisition specialist at the Marines. He then spent five years after retirement, spent five years in the professional consulting with one of the big four firms. And we're super, super lucky to have him come over and lead that organization now. and Q3 has been really busy in terms of standing that organization up. The AUSA conference was incredible for us just in terms of not just the amount of activity that was happening in Dragonfly in general, but the specific buzz about around AJ and and a couple of team members heading up drone defense or Dragonfly Defense USA, which would be headquartered out of Tampa. So the the other really important there's a number, but the other really important Greenberg, Paul Sun. Highways, and People. So there's only about four or five of these 44807s that have been passed in the States. Now, one of the things that's really important about this 44807, not the fact that it's just done on such a big drone, but that 44807 now actually also applies down onto our customers. So as our customers are buying this product, the waiver and the clearance is actually held by us. Now they still have to have their requisite licensing and stuff as well, but they don't have to go get a 44807 license as well. So we hold that and that stands for the drone and then our customers actually get to use it. So really excited that we, you know, it's not, it's a lot more than just the equipment certification. It's process, it's people, it's a whole stream of matters that have to be approved and pushed through by the FAA or approved by the FAA. So congratulations to the team on that. It has very big implications for sales coming up as it relates somewhat on the commercial side, because as we know, these are used to do to stand up cell towers in emergency situations where cell towers come down. These actually become cell towers. And but also on the military side, we've got a number of projects that we're in order to move forward and complete the sales, we had to get the 44807 certification. So pretty excited about that. Also up in Canada, the the drone, the drone defense initiative, which is Canada's $2 billion plus. Actually, I believe it's $3.8 billion over the next five years on category one, category two and some category three drones called Drone Greenberg, Paul Sun, in the basically the defense industry working with the Canadian government. So Dragonfly has qualified in the RFSA under all five categories, a big part of which obviously is the drone defense initiative marketplace. So you have to be a Canadian company to actually participate in that, which basically lines us up. If we continue to be successful with what's happened here over the last quarter and is indicative of what's coming in the future, then we should see ourselves hopefully getting a pretty big chunk of that spend. Now, as a part of that, we did strengthen our Canadian leadership significantly. We now have Kevin LeBlanc, who's come on board. Super excited about Kevin joining us. He comes out of the Canadian Armed Forces, a colonel in the Air Force. Greenberg, previous director of NORAD, et cetera, et cetera. And Kevin is actually heading up our Canadian defense and security. So he would be very similar to what AJ is doing in the States, who's taking on Dragonfly Defense USA. Kevin's running our military or defense security operations, sales and initiatives in Canada. So he brings an unbelievable amount of experience to the table, not just from CAF, but also from international NATO, as well as a ton of global affairs experience as well. So actually, Kevin and I are off traveling the next two weeks to the Philippines and the Ukraine. Really excited about the work that we've been able to get done there and which will be coming to fruition here in the next couple of weeks. So on the specific sales side, a couple of things that that are important. In particular is the selection by the government of Canada, DND in particular, for our low cost tactical ISR drones. So this is a up to 40, excuse me, up to 5000 drone order, a total of $25 million. There are a couple of people that are there are a few people, excuse me, that are included in this bid. So what happens is we we actually deliver the first hundred drones here in short order. They go through a bunch of training. They go through a bunch of tests and then then those those drones and they start making subsequent orders depending on demand that we've been able to create. We feel really confident about what we've been able to deliver here. This particular drone is really kind of like a new category of drone that the Canadian Armed Forces have required for themselves. So it's kind of like an FPV, except it's really more designed as an ISR drone for surveillance and reconnaissance. But the difference is it's almost a throwaway. You wouldn't call it a throwaway, but it is kind of considered a consumable. So if you're in a situation and you've got a squad out and they need to see just what's over the next hill, like that doesn't have to be more sophisticated than that. They can go see what's over the next hill. And if they end up losing it, they end up losing it type of thing. So it's not the intent to lose it, but it needs to be something that is a piece of equipment that's disposable in the field if need be. It certainly can cross over, in my opinion, as a as a one way strike mechanism as well. So basically, it's an upgraded FPV with much better optics on it. And we're excited about what this has to do for a category. Also, this last quarter, we were very pleased and honored to take an investment from Unusual Machines. And this is really for us more about working with a fantastic company down there who has a terrific lineup of NDAA parts. and and really driving our U.S. business through AJ and Dragonfly Defense USA. So we'll be down at their event here coming up shortly and look forward to a number of ongoing strategic talks and initiatives that we have ongoing with them. So I think, you know, overall, there we go. Just before I get to turn this over to the financials. We have seen our first down quarter in a long time. Now, we're very conscious of it. We absolutely knew it was going to happen. We needed to do this in order to basically hold production capability for this current order that we're starting to work on now. from the CAF, as well as a number of other not yet announced, not just initiatives, but situations or scenarios that we have to be ready for. I can tell you unequivocally that we have never been busier. We have never seen volumes moving faster. Paul Mullen, Paul Sun

Thanks, Cam. Thanks, everyone, for joining. Thanks for setting the stage there. Yeah, so revenue for third quarter was down slightly 5% to $2 million from $2.1 million in the third quarter of 2025. That was actually primarily due to some lower services work. Third quarter revenue comprised of $1.6 million from product sales, which was pretty much flat year over year. with $436,000 coming from drone services. Gross profit $129,000 compared to $421,000 in Q3 of last year. Q3 did have a one-time non-cash write-down of inventory of $367,000. So otherwise it would have been $496,000 compared to The same period last year where there was a one time inventory write down of $43,000, making the adjusted gross profit of $464,000. So the adjusted gross margin for Q3 was actually 24.2% compared to last year's adjusted number of 21.5%. So there was an improvement year over year from a gross margin and profit perspective year over year. Greenberg, Paul Sun and that one-time inventory write-down of $367,000 that I just mentioned. So breaking that out, the loss would have otherwise been $12.6 million versus an adjusted loss of $3.6 million in the same quarter of 25. The increase in loss is primarily due to higher office and miscellaneous costs, some share-based compensation, professional fees, wages and travel and whatnot. As Cam mentioned, we've been very busy and scaling the business from the same time last year. If we move to the next slide, we'll go to, we just kind of went over the year over year changes. So now just go through the quarter over quarter changes between Q3 of 26 and Q2 of 26. So Q3 revenue decreased about 23% to 2 million compared to 2.6 million for Q2, mainly due to lower services sales. Again, you'll recall Q2 was our best quarter. So we just had this timing as well as some services changes quarter over quarter. Gross margin percentage for Q3 was 6.3% compared to 20% in Q2 of this year. However, again, if we back out that one-time inventory write-down that I mentioned before, gross margin again for Q3 was 24.2%. Co., Ltd. TOTAL COMPREHENSIVE LOSS FOR Q3 WAS 13 MILLION AGAIN COMPARED TO A COMPREHENSIVE LOSS OF 11.8 FOR Q2 OF 26 SO AGAIN WE HAD THAT FAIR VALUE OF DERIVATIVE LIABILITY OF 57,000 THE WRITE DOWN OF INVENTORY SO IF WE BREAK THAT OUT AGAIN COMPREHENSIVE LOSS ON AN ADJUSTED BASIS IS 12.6 MILLION COMPARED TO AN 11.8 MILLION EXCLUDING ALL THE NANCASH THE NONCASH ADJUSTMENTS FOR Q2 OF THIS YEAR SO The slight increase in quarter over quarter is primarily due to some higher office and miscellaneous costs and wages as we've added more headcount quarter over quarter. Next slide, Kim. I think we got the balance sheet. Yeah. So here you can see total assets increased from $101 million to $158 million, which is largely due to the increase in cash. The working capital surplus as at the end of the quarter was $144 million versus $95 million from the end of 2025. Shareholders' equity was $151 million at Q end compared to $96.6 million at the end of last year. However, both working capital and shareholders' equity would have been even higher if we X'd out the non-cash fair value of derivative liability. of $376,000 for this quarter as well as at the end of the year. We do continue to have minimal debt and our cash balance at the end of the quarter was $128 million compared to $90.2 million. Again, as we did a financing earlier in the year in February, as well as the most recent strategic financing that Cam mentioned towards the end of September. And with that, I'll pass it back to you, Cam.

Excellent. What I'll do now is I'm going to go to the Q&A. Just a quick reminder on everybody that we've got, this is our full product lineup. There are a number of other products that are coming out, being announced in the next couple of quarters as a result of some very direct sales processes that we've gone through with a number of different militaries. But as it stands right now, we've got the Flex, the Apex, the Commander and the Heavylift. Greenberg, Paul Sun. Greenberg, Paul Mullen, Paul Sun, I'm excited to answer a couple of questions on that. And we've got the Soton, which is kind of like our DJI Mavic type of replacement drone. So pretty excited about that product lineup as well as what's coming down and all the variants of these as well. So what I'm going to do is I'm going to just go to a bunch of questions that were sent in. I'm going to get them pulled up here for one sec. So the first one that Roli sent over that came in is revenue growth is still slow. When do we expect to see a real inflection point? And I would have liked to hope to see it would have happened already. However, you know, knowing knowing what we know about the industry now, I can see why that inflection point, it may be specifically for us, but maybe for a bunch of others also hasn't happened up until this point. So, you know, I think we're we're looking to see that happen in a, you know, kind of like a Q2 ish of of twenty seven in particular, a Q3. That's frankly that's about a year behind what I thought it would be. But we are what we're now seeing is that, well, in the US, it's probably backed off a bit just because of everything from the continuing resolutions and a bunch of election stuff and a bunch of money getting unlocked in order to flow through particular programs that us and many others have won. In other situations like Canada and maybe a few other militaries that we're fortunate to deal with, they're actually now just coming to fruition. So we did see our first win this year, which was the first contract that the Canadian Armed Forces let out under its drone defense initiative, which is a $25 million contract. So we're super excited to be executing on it. and then we have been very busy and expect announcements before the end of the year, at least on two more. There are actually 19 RFPs that we are involved with across the Canadian military right now, just to give you a size and scope. But those all took, you know, they've all taken until this point to get there. So we have been Greenberg, and Paul Sun. Now on production, but we've had to switch some of the production lines because of some matters that have to do with sales and contracts being one. And so I think the real specific reasons of that will come to light here over the next couple of weeks for you. So Canada announced a big commitment to drones in the recent budget. And how do we expect that? How much of that do we expect to get? made several key hires over the last six months in order to meet this demand that's now upon us, just in order to be even to respond to the demand that we've had from bids and such has been overwhelming, much less now starting to deliver on it. So, you know, as a percentage or how much of it, you know, we're not really focused on that. We are focused on doing the best job that we can and winning the business that we can do to do the best job for those operators out there. But it's certainly over the course of the next couple of years, well into the hundreds of millions of dollars. Why did we invest in a Ukraine software company and what is our strategy in the Ukraine? So we invested in DoD software for a couple of reasons. One, they're really, really good at what they do and they actually can supplement our engineering and software capabilities. But they have a fantastic terminal guidance system. They are also part hardware and part software. So they aren't just developing software, but they've actually got the hardware that goes along with it. Now, in the FPV market, there's one in particular kind of like dominant camera and board that's analog. And analog is super important because it's harder to jam. But the latency is also such that it takes a pretty... and the rest. The market is looking for a way to move off of their particular camera and board solution. So DOD provides us that opportunity to do it. They also are supplying five other of the top Ukrainian, five top Ukrainian manufacturers with variants of their boards and terminal guidance and such. So just in terms of our network that exists, We just felt that this was pretty strategic. As mentioned, Kevin and I, a number of people are going to be in country in the next couple of weeks, and probably some more of this will come to light at that time. So with the recent sell-off in most drone stocks, Do we see a consolidation in the industry? Yeah, for sure. We've got a number of acquisitions that we're looking at. As you know, we're sitting on a pretty healthy balance sheet right now. We're very conservative with our cash. We definitely, as we move into this phase of the industry where there will likely be consolidation, we definitely want to be one of those companies that can afford to be taking advantage of that. So I don't know that we I don't know that we'll see it at like the kind of like the top public company names for some time or maybe if ever. But certainly for the next year, I don't see it there. But a lot of the private companies, a lot of the component makers, a lot of the folks that were participating in the the picks and shovels of the industry. I do see that, you know, now starting to consolidate into into the known names out there. So I know there's been a call for like bigger consolidation and happening and some of that will happen, but I don't see it as prevalent as maybe what some others are predicting. So with the recent midterm election results, do we expect that to negatively affect U.S. drone specific spending? Well, The budget went up to a trillion and a half. Now it's going to come down to a trillion. That's still hundreds and hundreds and hundreds of billions of dollars more than it was before. So on the overall picture, if we were looking year over year, the answer would be no, I don't see an effect. If we look at maybe short term, I do see some, you know, some squeeze happening in terms of like more funds not getting released, you know, things getting drawn out more. Greenberg, Paul Sun, However, overall, you know, stocks need to be replenished. There's a rearmament going of an entire category of, you know, military strategy, tactics, weapons, mass low cost, mass precision. Like these are all that the cat's out of the bag. Like all of that's going to have to continue to happen. And, you know, historically, we have not seen Democrats spend less money on defense stocks. Greenberg, Paul Sun, is rearming and retooling. So we've got a 10-year policy cycle here of increased budget. So next question I have is, I haven't seen contracts being announced for ORCA. Do we expect any to come? Absolutely. The product itself has been an incredible addition to the product line. It's opened up an entire new set of doors for us. It's also given great capability to our existing product line, because remember, most buying is happening not for a single purpose, but for missions now. And so being able to combine fixed wing capability Long Range Strike, Long Range Loiter, or Long Time Loiter capabilities, along with the multi-rotor line has been fantastic. So the answer is, I can't say more than that, but the answer is, yeah, super excited about what's happening there. And I think you'd be pleased over the next couple of quarters. Are we still focused on counter-drone technology? For sure. So we were awarded a dev group Greenberg, and Paul Sun. participating in bids and opportunities around counter drone, in particular on our public safety around security, private security. We really believe we've built up a very significant pipeline of work in that regard as well. as what we're doing in public safety and on the military side. So counter drones, it's just becoming part of what a drone company is. It's pretty tough to be doing drones at all unless you're also doing counter drone. So being one in the same has given us great advantage. And it's a lot of the same expertise, a lot of the same equipment, a lot of the same policy. So not a huge amount of cost to making sure that you can offer a 100% solution to your customer. So and then final question here is what is management's long term and midterm plan to achieve self-sustaining cash flow without relying on continued share dilution? Well, we're going to we're going to be driving three areas. So maybe just to recap. So we have three particular verticals that we focus on. We have our commercial industrial, which historically was quite prevalent for us. So now it's our smallest division, but really important. And we do a specific type of work in there that's key, especially for the future. We have our public safety business and we have our military business. Currently, the military business is driving things forward. We have Canadian military, we have U.S. military, and we have international military, much of which we'll be talking quite a bit about over the next couple of weeks. And it's really about just building size, volume in those areas now. We've developed incredible, I believe anyway, incredible capabilities in those areas that match what those particular militaries are looking for. and it's taken them those years, those militaries, to understand what it is that they really need. And so we'll be providing products into them, but also providing manufacturing capability. And so more of that to come in the coming weeks. On the public safety side, we are dealing primarily in Canada and the United States We are just about to launch our DFR product, which we're excited about. Our campus facility, our campus program in particular, has really taken off for us. We are engaged only with three campuses right now by design. Very simply because we're really working through all the very finite details of operations and training and such. But we literally have a list of 1,500 campuses that have inquired right now. There's about 3,000 in the United States in total. So we will go full bore on that after the next quarter and we get through the rest of the implementation of these three so that we've got Showcases, testimonies, use case scenarios, studies on every question that can be answered around that. So also in public safety, we tend to focus on small, rural, tribal, sheriff and border because our equipment is really designed a bit more for heavier use, a longer range situation. You know, heavier payloads, multi payloads, things like that. It lends itself more to those types of environments as opposed to being, you know, necessarily in New York or San Francisco or such where where we've got great competitors like Skydio and Brink that are battling it out for market share there. So so and then obviously on the military side, we're just you know, we're going to grow with the military budgets as they grow over the next number of years. Now, listen, we also think we've got a terrific lineup of products that are differentiated. And so we'll continue to hone in and and make those differences, continue to use our ITS team, our integrated tactical solutions team. Greenberg, and Paul Mullen. We're in a unique situation where we're a 27-year-old startup. So we had the ability to go wide before we went deep. And so that breadth now is pretty much put in place. And I think what you'll see actually over the very short order here, but certainly over the coming quarters, you'll see that the depth of that now be able to penetrate and start to drive some pretty significant announcements and orders for us. On that note, I think I've covered off everything. I appreciate everybody's patience. Really wanted to thank three particular groups. First of all, the people that work with us, our employees, the amount of commitment that we see in this organization, what people are willing to do to live our purpose, which is to be of service to others and to save time, money and lives. So first of all, thank you to you. Thanks also to our customers for sure. Greenberg, Paul Mullen, We'll continue to do our best to be of service. Thanks very much and talk to you soon.