Draganfly Shareholder Update and Q2 Earnings Call

Key Financial and Operational Highlights for Q2 2022:

Revenue for the second quarter of 2022 was $2,370,115, an increase of 19.6% year-over-year from the second quarter of 2021 with all sales coming from organic growth. The bulk of the revenue came from product sales while drone services sales were $837,131.

Gross Profit for Q2 2022 increased $284,996 over the same period in 2021 representing an increase of 39.1% year over year. Gross margin percentage for Q2 2022 was 42.8% compared to 36.8% in Q2 2021. The increase is due to the sales mix of the products sold.

The Company recorded a comprehensive income of $0.64 million in the second quarter of 2022 compared to a loss of $8.10 million in the same period of 2021. The comprehensive income for the period includes a non-cash gain in fair value of derivative liability of $6,094,438 and would otherwise be a loss of $5,454,114. The second quarter of 2021 included a non-cash loss in fair value derivative of $4,821,177 and would otherwise be a loss of $3,274,179. Contributors to the year-over-year change included increased insurance and wage costs partially offset by increased revenues.

Cash balance on June 30, 2022 of $16.2 million compared to $23.1 million on December 31, 2021.

Draganfly launched its Heavy Lift and Commander 3 XL Drones. Draganflys Heavy Lift Drone is a versatile, industrial, multirotor unmanned aerial vehicle (UAV) that is designed to lift more and fly further. Capable of automated missions and manual flight operations, the Companys heavy-duty, robust UAV has a payload lift capacity of 67 pounds and up to 55 minutes of flight time. Draganflys Commander 3 XL Drone is a high-endurance, weather-resistant, multirotor UAV that is designed for easy assembly and rapid deployment. The Swiss Army Knife of drones is capable of drop and winch-down systems to transport up to 26 pounds of payload. It performs extremely well in light rain and snow. Both Draganflys Heavy Lift and Commander 3XL Drones are compatible with a variety of interchangeable payloads, including optical and thermal imaging solutions, specialized delivery containers, and the Companys Long Range LiDAR system.

Draganfly announced its new Long Range Light Detection and Ranging (LiDAR) system. the Long Range LiDAR system is able to provide accurate distance measurements and improved resolution over conventional photogrammetry methods. Draganflys Long-Range LiDAR system is compatible with unmanned aerial vehicles (UAVs), helicopters, and other aircraft. It can also be used as a mobile scanning solution when mounted on a vehicle or backpack. The Companys cutting-edge sensor technology can be used for multiple applications, including mapping and surveying forests, cities, real estate, energy infrastructure, and telecommunications infrastructure, to name a few customer-driven use cases.

Draganfly successfully completed deployment and training of its Medical Response Drone to Revived Soldiers Ukraine (RSU), in partnership with Coldchain Delivery Systems, LLC (Coldchain Delivery Systems). Draganflys Medical Response Drone is equipped with the Companys temperature-managed Medical Response Payload Box, which can transport up to 35 pounds of temperature-sensitive medical supplies, including blood, pharmaceuticals, insulin/medicines, vaccines, water, and wound care kits. The innovative payload system on this type of drone ensures ease of access when top mounted and effective quick-release operations when bottom mounted.

Draganfly provided Revived Soldiers Ukraine (RSU) with five highly specialized Medical Response Drones using funds provided by DroneAid: Ukraine. Draganflys Medical Response Drones are heavy-duty, multirotor UAVs capable of ensuring the timely delivery of temperature-sensitive medical supplies and life-saving equipment to dangerous and hard-to-reach areas.

Draganfly partnered with Coldchain Delivery Systems, Inc. (Coldchain Delivery Systems), to deploy and train its first two Situational Assessment Drones to Revived Soldiers Ukraine (RSU). The Situational Assessment Drones were received by Iryna Vashchuk Discipio, President of RSU, and members of her staff, including pilots, at a facility in Poland on June 10, 2022. The drones were then transported to Ukraine, where the Companys experienced pilots conducted a thorough virtual training with RSUs drone operators.

Alabama State University (ASU) is offering the Draganfly Drone Technology Course through ASUs Division of Continuing Education. Draganflys experienced team is sharing their vast industry knowledge with a variety of ASU faculty members and students. The program provides an introduction to unmanned aerial vehicles (UAVs) and explores advanced topics including regulations, airspace operations, and navigation. Draganflys Drone Technology Course includes a Federal Aviation Administration (FAA) Part 107 drone preparation course.