Red Cat Holdings Inc (RCAT) 2022 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Good afternoon and welcome to the Red Cat Holdings fiscal second quarter 2022 financial results and corporate update conference call. At this time, all participants are in a listen-only mode. (Operator Instructions). I would now like to turn the call over to Scott Gordon, President of Core IR, the Company's investor relations firm. Please go ahead.

各位女士、先生，感謝您稍候。下午好，歡迎參加 Red Cat Holdings 2022 會計年度第二季財務業績與公司最新進展電話會議。目前所有與會者皆為僅收聽模式。（接線員指示）。現在我想把電話交給公司投資人關係顧問公司 Core IR 的總裁 Scott Gordon。請開始。

Thank you, Ilie. Good afternoon, everyone, and thank you for joining us for the Red Cat Holdings fiscal second quarter 2022 financial results and corporate update conference call. Joining us today from Red Cat Holdings are Jeff Thompson, Chief Executive Officer of Red Cat Holdings; and Joseph Hernon, Chief Financial Officer. During this call, management will be making forward-looking statements, including statements that address Red Cat's expectations for future performance for operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in Red Cat's most recently filed periodic reports on Form 10-K, Form 10-Q, and Red Cat's press release that accompanies this call, particularly the cautionary statements in it.

謝謝你，Ilie。各位下午好，感謝各位參加 Red Cat Holdings 2022 會計年度第二季財務業績與公司最新進展電話會議。今天與我們一同出席的 Red Cat Holdings 團隊成員包括：Red Cat Holdings 執行長 Jeff Thompson，以及財務長 Joseph Hernon。在本次電話會議中，管理層將做出前瞻性陳述，包括涉及 Red Cat 對未來表現與營運結果之預期的陳述。前瞻性陳述涉及風險及其他因素，可能導致實際結果與該等陳述存在重大差異。關於這些風險的更多資訊，請參閱 Red Cat 最近提交的 Form 10-K、Form 10-Q 等定期報告中所描述的風險因素，以及隨本次電話會議一併發布的 Red Cat 新聞稿，特別是其中的警示性陳述。

The content of this call contains time-sensitive information that is accurate only as of today, December 20, 2021. Except as required by law, Red Cat disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It is now my pleasure to turn the call over to Jeff Thompson, Chief Executive Officer. Jeff, please go ahead.

本次電話會議內容包含具時效性的資訊，僅在今日（2021 年 12 月 20 日）為準確。除法律要求外，Red Cat 不承擔任何公開更新或修訂任何資訊以反映本次電話會議後發生之事件或情況的義務。現在我很榮幸把電話交給執行長 Jeff Thompson。Jeff，請開始。

Great. Thank you, Scott. Good afternoon, and thank you all for joining our fiscal second quarter 2022 call webcast. Also joining me today is Joseph Hernon, our Chief Financial Officer. We have completed many milestones in Q2: we were awarded a NASA contract, we closed the Teal Drones acquisition, we have brought on key hires for our business development and sales, and opened a US manufacturing facility in Salt Lake City.

很好。謝謝你，Scott。各位下午好，感謝各位參加我們 2022 會計年度第二季的電話會議網路直播。今天與我一同出席的還有我們的財務長 Joseph Hernon。我們在第二季完成了許多里程碑：我們獲得了 NASA 合約、完成了 Teal Drones 的收購、延攬了業務開發與銷售的關鍵人才，並在鹽湖城開設了美國製造工廠。

I will start and review our consumer companies, Rotor Riot and Fat Shark. Fat Shark is continuing to develop its digital system called Shark Byte. Shark Byte is a high-quality, low-latency, high-def FPV, which means First Person View system. We are now seeing approximately 50% conversions from analog to digital. We expect that to add momentum to the 2022 calendar year revenue. We are also seeing crossover opportunities in commercial and military use cases.

我將先回顧我們的消費者業務公司 Rotor Riot 與 Fat Shark。Fat Shark 持續開發其名為 Shark Byte 的數位系統。Shark Byte 是高品質、低延遲、高畫質的 FPV（即 First Person View，第一人稱視角）系統。我們目前看到約 50% 的用戶從類比轉換到數位。我們預期這將為 2022 日曆年度的營收帶來動能。我們也看到在商用與軍用情境中的交叉應用機會。

I will now turn to Rotor Riot. Rotor Riot produces weekly drone media and has an online store we can buy products seen on the weekly YouTube shows. Rotor Riot continues to grow and has over 235,000 subscribers. We are happy to report that we have been able to get most of our Rotor Riot supply chain issues fixed that were causing us to be out of stock on popular items. We expect the store to gain new users as Rotor Riot becomes a one-stop store for ready-to-fly FPV drones and has reliable inventory.

接著談 Rotor Riot。Rotor Riot 每週製作無人機媒體內容，並經營線上商店，讓大家可以購買每週 YouTube 節目中出現的產品。Rotor Riot 持續成長，訂閱者已超過 235,000 人。我們很高興報告，我們已能解決先前導致熱門品項缺貨的多數 Rotor Riot 供應鏈問題。我們預期，隨著 Rotor Riot 成為可即飛（ready-to-fly）的 FPV 無人機一站式商店，並具備穩定庫存，商店將吸引更多新用戶。

Next, I will talk about Skypersonic. Skypersonic has a drone platform that combines artificial intelligence software with the camera and sensors of the Skycopter inspection UAV. They also have remote piloting capabilities which breaks the one drone, one pilot drone problem. This capability was crucial in getting the five-year NASA contract we announced in September.

接下來，我將談 Skypersonic。Skypersonic 擁有一個無人機平台，將人工智慧軟體與 Skycopter 檢測 UAV 的相機與感測器結合。他們也具備遠端操控能力，解決「一台無人機、需要一名飛手」的問題。這項能力是我們在 9 月宣布取得為期五年的 NASA 合約的關鍵。

NASA's crew will conduct simulated spacewalks and operations by remote piloting Skypersonic drones and rovers in a simulated Martian environment. Skypersonic's real-time transoceanic remote piloting platform will drive the piloting on both the drones in the rover. We believe Skypersonic's software and hardware platform will benefit also from this recent infrastructure bill that was passed. There are millions of miles of sewer that will need inspections and hundreds of thousands of bridges that will need inspection. We expect Skypersonic to have an exciting 2022.

NASA 團隊將在模擬的火星環境中，透過遠端操控 Skypersonic 的無人機與探測車（rover），進行模擬太空漫步與作業。Skypersonic 的即時跨洋遠端操控平台將驅動對無人機與探測車的操控。我們相信，Skypersonic 的軟硬體平台也將受惠於近期通過的基礎建設法案。將有數百萬英里的下水道需要檢測，且有數十萬座橋梁需要檢測。我們預期 Skypersonic 在 2022 年將有令人振奮的表現。

Let's dive into our newest acquisition, Teal Drones. Teal Drones has built a complete drone platform. We believe it is one of the most capable drones in its category. I recently toured the new facility and was able to see the Golden Eagle fly simulated missions. Its performance was incredible; it's quiet, it's stable and reliable. We recently announced the opening of a manufacturing facility of approximately 13,000 square feet. We have since decided to double the size of the manufacturing to 26,000 square feet. These new production lines will be able to produce thousands of drones a month. We have invested in machinery, robots, and inventory to meet existing and expected contract awards.

接著深入談我們最新的收購案 Teal Drones。Teal Drones 建立了一個完整的無人機平台。我們相信它是同級產品中最具能力的無人機之一。我最近參觀了新設施，並看到 Golden Eagle 進行模擬任務飛行。其表現令人驚艷；它安靜、穩定且可靠。我們近期宣布啟用約 13,000 平方英尺的製造工廠。此後我們已決定將製造規模加倍至 26,000 平方英尺。這些新的生產線每月可生產數千台無人機。我們已投資於機械設備、機器人與庫存，以滿足既有及預期將獲得的合約授予。

Before we talk about contracts, I would like to talk about the recent events in the US. DJI was put on the Department of Commerce entity list last December. The US government will place eight Chinese companies, including drone manufacturer DJI, on the investment block list. The House has a bipartisan bill spanning existing government fleets of Chinese drones. The Senate has a similar bipartisan bill and we expect both to pass. This gives Teal a great opportunity to fill the gap with made in USA drones. By banning all federal dollars from Chinese drones, this opens public safety and first responders as a new category for the Golden Eagle. These new bills could also ground thousands of Chinese drones that will require immediate replacement from made in USA drones.

在談合約之前，我想先談談美國近期的事件。DJI 去年 12 月被列入商務部實體清單。美國政府將把包括無人機製造商 DJI 在內的八家中國公司列入投資禁令名單。眾議院提出一項兩黨共同支持的法案，涵蓋現有政府機隊中的中國無人機。參議院也有類似的兩黨法案，我們預期兩者都會通過。這為 Teal 提供了以美國製造無人機填補缺口的絕佳機會。透過禁止所有聯邦資金用於中國無人機，公共安全與第一線應變人員將成為 Golden Eagle 的新類別市場。這些新法案也可能使數千台中國無人機停飛，並需要立即以美國製造無人機替換。

So now let's talk about SRR. Most of the questions I get from investors is basically about the short range of products since tranche two. The SRR contract is to put a drone in every rucksack. Teal Drones is almost 2 years into this process. We have nothing new to report and will update our investors as soon as we hear back from the Army.

現在來談 SRR。我從投資人那裡收到的大多數問題，基本上都與第二批次（tranche two）之後短程偵察（SRR）產品的進展有關。SRR 合約的目標是讓每個背包（rucksack）都配備一台無人機。Teal Drones 在這個流程中已進行將近 2 年。我們目前沒有新的資訊可報告，一旦收到陸軍回覆，我們將盡快向投資人更新。

I will now hand the call over to Joseph Hernon, our CFO.

現在我把電話交給我們的財務長 Joseph Hernon。

Thanks, Jeff, and to everyone for joining the call today. I will now provide a review of our financial results for our second fiscal quarter which ended on October 31, 2021. Revenues during the quarter totaled almost $1.9 million, representing a new quarterly record for the Company. This represented an increase of more than 300% compared to the second quarter of last year and an increase of 33% compared to our first quarter of this fiscal year. We expect to report continued sequential revenue growth going forward.

謝謝你，Jeff，也感謝各位今天參加電話會議。接下來我將回顧我們截至 2021 年 10 月 31 日止的第二個會計季度財務結果。本季營收合計接近 190 萬美元，創下公司單季新高。相較去年第二季成長超過 300%，相較本會計年度第一季成長 33%。我們預期未來將持續呈現逐季營收成長。

Gross margin as a percent of revenues was 8% during the second fiscal quarter compared to 7% in the first fiscal quarter and 19% during the second quarter of last year. The lower gross margins that we have been experiencing in the first half of fiscal '22 reflect higher product and shipping costs as we have been impacted, like many businesses, by COVID-19. We expect gross margins to improve going forward, especially as we begin to scale up manufacturing at our newly opened and expanded facility for Teal Drones in Salt Lake City.

第二個會計季度的毛利率（占營收百分比）為 8%，相較第一個會計季度為 7%，去年第二季為 19%。我們在 2022 會計年度上半年所經歷的較低毛利率，反映了產品與運輸成本上升；如同許多企業一樣，我們受到 COVID-19 的影響。我們預期未來毛利率將改善，特別是當我們開始在鹽湖城新啟用並擴建的 Teal Drones 工廠擴大製造規模之後。

Operating expenses totaled $2.9 million in the second fiscal quarter compared to $1.8 million in the first fiscal quarter and $500,000 in the second quarter of last fiscal year. This increase compared to the second quarter last year reflects the acquisitions of Fat Shark, Skypersonic and Teal, all of which were acquired subsequent to our reporting results for the second fiscal quarter of the last year, a sequential increase compared to our first fiscal quarter related to the acquisition of Teal Drones which closed early in the second quarter and represents our largest acquisition to date.

第二個會計季度的營業費用合計為 290 萬美元，相較第一個會計季度為 180 萬美元，去年第二季為 50 萬美元。與去年第二季相比的增加，反映了 Fat Shark、Skypersonic 與 Teal 的收購；這些公司皆是在我們去年第二個會計季度財報結果之後才完成收購。相較本會計年度第一季的逐季增加，則與 Teal Drones 的收購有關；該交易於第二季初完成，並且是我們迄今為止最大的一筆收購。

Net loss for the second quarter totaled approximately $2.7 million compared to $1.6 million in the first fiscal quarter and $700,000 in the second fiscal quarter. We ended the second fiscal quarter with almost $60 million in cash and investment. For the first six months of our current fiscal year, ending on October 31, our year-to-date net loss adjusted for non-cash expenses such as stock-based compensation was $3 million, meaning that our current cash balance provided approximately 20 times coverage of that net loss for the first six months of this fiscal year. I think that really demonstrates that we're in a really good financial position to execute on our growth initiatives over the balance of the fiscal year.

第二季淨損約為270萬美元，相較於第一個會計季度的160萬美元以及去年第二個會計季度的70萬美元。我們在第二個會計季度結束時，持有將近6,000萬美元的現金與投資。截至10月31日止的本會計年度前六個月，我們年初至今的淨損（已調整股票基礎薪酬等非現金費用）為300萬美元，這表示我們目前的現金餘額，約可覆蓋本會計年度前六個月該淨損的20倍。我認為這確實顯示，我們在財務上處於非常有利的位置，能在本會計年度剩餘期間推動並落實我們的成長計畫。

I will now turn the call over to the operator for questions.

我現在把電話交給接線員進行問答。

(Operator Instructions). Kevin Dede, HCW.

（接線員指示）。Kevin Dede，HCW。

Hi, Jeff, Joe. Thanks for taking my call. Congrats on the numbers. I'm thinking most of the $1.9 million was generated by Teal. Is that the right way to think about it?

嗨，Jeff、Joe。謝謝接聽我的電話。恭喜這些數字。我在想，這190萬美元大多是由Teal帶來的。這樣理解對嗎？

Not yet (laughter). Yes. Go ahead, Joseph.

還沒有（笑聲）。是的。你繼續，Joseph。

Yes, I would just echo that short statement Jeff made. I think at this point, Kevin, in looking back on the second fiscal quarter, certainly Teal made an immediate impact on our revenues. But it wasn't even a full quarter yet for the Company. And I will let Jeff comment maybe on the outlook going forward. Jeff?

是的，我只是呼應Jeff剛才那句簡短的話。我想就目前而言，Kevin，回頭看第二個會計季度，Teal確實對我們的營收立刻產生了影響。但對公司來說，那甚至還不是完整的一個季度。我讓Jeff也許再評論一下未來展望。Jeff？

Yes, Kevin, it was -- they did contribute, but I think they're going to significantly start to contribute as we head into the next calendar year. As we mentioned in our press release, we expect them to start generating about $1 million a month starting around January. We expect that to actually move up as we get into -- further down the year. And we are getting lots of traction. We are continuing to work with the large contracts on the government, hoping to land some of those soon. But we are also actually already out there -- our biz dev team has been flying around the globe going to other NATO countries and pitching the Golden Eagle and doing demonstrations to other military countries, and we'll get some good traction there. So we're going to have -- starting early next year, we are going to have some pretty aggressive revenue growth coming from the Teal acquisition.

是的，Kevin，他們確實有貢獻，但我認為當我們進入下一個曆年時，他們將開始做出顯著貢獻。如同我們在新聞稿中提到的，我們預期他們大約從1月起開始每月帶來約100萬美元的收入。我們預期隨著年度進一步推進，這個數字還會上升。而且我們正在獲得大量進展。我們持續推進政府端的大型合約，希望能很快拿下一些。但同時我們也已經在外面——我們的業務開發團隊正飛往全球各地，前往其他北約國家推介Golden Eagle並進行展示，對其他軍事國家也會取得不錯的進展。因此，從明年初開始，Teal併購案將帶來相當積極的營收成長。

Can we look at it from another perspective, Jeff? What would you estimate that DJI's revenue run rate was in their sales to US customers where they've now been excluded?

Jeff，我們能從另一個角度來看嗎？你會如何估算DJI在對美國客戶銷售、而如今已被排除在外的那部分收入的營收運行率（run rate）？

Yes, so they are -- I haven't been able to find any recent numbers because they've basically been thrown out of any government and enterprise capability right now. So they are -- I wouldn't have those numbers and no one would share them with us. But we believe there is hundreds of millions of dollars of potential revenue from DJI not being allowed to be part of government funding anymore, whether it's -- we know some fleets that are in public safety that are over 1,000 drones that are actually DJI drones currently, which we know if some of these bills get passed where you can no longer fly your existing fleet that are Chinese made. You can't renew anything and you can't buy anything new. But to ground the existing fleet could be thousands of drones per department. Obviously the military isn't doing anything with Chinese drones, but those contracts are also very large. So we think that there is this vacuum from the DJI ban and now all the Chinese drone bands are really going to drive things hopefully as close to the Golden Eagle's than anyone else.

是的，所以他們——我一直找不到任何近期數字，因為他們目前基本上已被排除在任何政府與企業端的能力之外。所以我沒有那些數字，也沒有人會與我們分享。但我們相信，因DJI不再被允許參與政府資金相關項目，存在數億美元的潛在收入，不論是——我們知道有些公共安全單位的機隊超過1,000架無人機，而目前其實是DJI無人機；如果某些法案通過，讓你不能再飛行現有的中國製機隊、不能續約任何項目、也不能購買任何新機，那麼讓既有機隊停飛，對每個部門而言可能就是數千架無人機。顯然軍方不會使用中國無人機，但那些合約也非常龐大。因此我們認為，DJI禁令以及現在對所有中國無人機的禁令所造成的真空，將真正推動市場，並希望把需求導向像Golden Eagle這樣、比其他任何產品都更接近的替代方案。

Who would you size up as able and ready to manufacture competitors?

你認為哪些競爭對手具備能力且已準備好進行製造？

That's a great question. I know that on the consumer side, of the five that are allowed -- that are in the SRR program, Skydio is probably the biggest threat. But I think that with our more military style bird, the Golden Eagle, the new manufacturing facility that we just set up is really going to give us the capabilities to meet those large contracts. But I would -- but for competitors, I would say there's only Skydio that we would have to worry about.

這是個很好的問題。我知道在消費端，在SRR計畫中被允許的五家之中，Skydio大概是最大的威脅。但我認為，以我們更偏軍規風格的機型Golden Eagle而言，我們剛建立的新製造設施，將真正賦予我們承接那些大型合約所需的能力。不過——就競爭對手而言，我會說我們只需要擔心Skydio。

So granted Salt Lake City, but my understanding was you were trying to build out facilities in PR. Am I thinking about that incorrectly? And then why Salt Lake City?

所以，先不談鹽湖城，但我的理解是你們正嘗試在PR擴建設施。我是不是理解錯了？另外，為什麼選鹽湖城？

Yes, so the Teal team is all there. The manufacturing is going to be in Salt Lake City. We have just moved into a new facility that I was at two weeks ago. They are moving from basically preproduction to actually a real assembly platform where they can actually get better yields and better reliability. And again, from the activity that we have on the sales side now, we have actually opted to double the size of that factory just two weeks ago.

是的，所以Teal團隊都在那裡。製造將會在鹽湖城進行。我們剛搬進一個新廠房，我兩週前才去過。他們正從基本上的試產階段，轉向真正的組裝平台，如此能取得更好的良率與更高的可靠性。而且再一次，從我們目前在銷售端的活動來看，我們其實在兩週前就決定把那座工廠的規模加倍。

And when do you suspect you will be sort of at full factory utilization?

那你預期什麼時候工廠會大致達到滿載利用？

Well, I mean, the factory can put out thousands of drones a month. So for us to get there, that's going to take a while. But we are excited to get to 200, 300 drones a month over the next 12 months. We are not going to be stopping there. We will be -- the SRR contracts are getting awarded late next year, and we have other big opportunities. So we are going to be building this facility as quickly as we can. We have been buying up a ton of inventory. We are getting everything we need to get up to thousands of drones per month, which -- it may cost about $14,400 if you look at the GSA website. So it's going to be some pretty significant ramp in capability and revenue.

嗯，我的意思是，工廠每個月可以產出數千架無人機。所以對我們來說，要達到那個水準還需要一段時間。但我們很期待在未來12個月內達到每月200、300架。我們不會止步於此。我們將會——SRR合約會在明年較晚時開始授予，而我們還有其他重大機會。因此我們會盡可能快速地擴建這個設施。我們一直在大量採購庫存。我們正在取得一切所需，以提升到每月數千架無人機的產能；如果你看GSA網站，單價可能約為14,400美元。因此，這將會是產能與營收相當顯著的爬坡。

Well, congratulations, Jeff, Joe. Thanks for taking my questions.

那麼恭喜你們，Jeff、Joe。謝謝回答我的問題。

[Scott Michael], private investor.

[Scott Michael]，私人投資人。

Thank you. I don't know if I can be heard. Can you hear me okay? Okay, thank you. Do you have -- congratulations on the building, by the way. Is there a timeframe for the completion of the upgrade in the Teal production building?

謝謝。我不知道大家是否聽得到我。你們聽得到我嗎？好，謝謝。順帶一提，恭喜新廠房。Teal生產大樓升級完成是否有時間表？

Well, we just started building it in September and it's already producing drones. We closed in September and right away, we got into the new facility and started building the production and manufacturing capabilities. The new site is going to be right next to the existing site is -- we just signed. So that's going to take some while. But we can get up to thousands of drones in the existing location, but we are already planning to really bring capacity way up.

嗯，我們9月才開始建置，但已經在生產無人機了。我們在9月完成交割，隨即進入新設施並開始建立生產與製造能力。新址將會緊鄰現有廠址——我們剛簽約。所以那會需要一些時間。不過在現有地點我們就能提升到每月數千架無人機的產能，但我們已經在規劃把產能大幅拉升。

Okay. Thank you. Secondly, the timeframe for the Fat Shark development on the digital system, is there a timeframe for that as well as the Skypersonic infrastructure attempts?

好的，謝謝。第二個問題，Fat Shark在數位系統上的開發時程，有沒有時間表？以及Skypersonic在基礎建設方面的推進嘗試，是否也有時間表？

Yes, so I'll start with the last question first. As you all know, the infrastructure bill just got past this fall. No one is expecting significant awards to happen until at least mid-next year. So on the -- for actual infrastructure, official infrastructure contracts for Skypersonic, we don't think we'd see anything until mid next year. They are also doing a ton of work also around the globe, not just Teal Drones. But we've been working with Aramco. I know we just finished a large training -- attended training period for the Aramco drone purchases that they've made. We are continuing to work with GM on inspecting their sites and helping them with inventory in parking lots using our artificial intelligence.

是的，我先從最後一個問題開始。如各位所知，基礎建設法案在今年秋天剛通過。沒有人預期會在至少明年年中之前出現重大的標案授予。因此，就——就Skypersonic而言，針對實際基礎建設、正式的基礎建設合約，我們認為要到明年年中才可能看到任何進展。他們也在全球各地做大量工作，不只是Teal Drones。但我們一直與Aramco合作；我知道我們剛完成一個大型訓練——參與了Aramco已採購無人機的訓練期。我們也持續與GM合作，協助檢查他們的場址，並運用我們的人工智慧協助他們在停車場進行庫存盤點。

And there is -- we continue to get other wins and we are starting to see not just the Teal Drones made in USA is important, but a lot of large companies do not want to award inspection contracts to Chinese-made inspection drones. So our made in USA Skycopter also gives us some great opportunities for here and now inspection revenue, which you will continue to see -- hopefully we continue to see more wins like we did with NASA. And the remote piloting capability gives us a huge advantage and we're also made in USA. So I think you will see some steady growth out of Skypersonic and then we don't know what's going to happen once we start seeing infrastructure dollars hit.

而且還有——我們持續拿下其他案子，我們也開始看到，不只是美國製造的 Teal Drones 很重要，還有許多大型公司不想把檢測合約授予中國製的檢測無人機。因此，我們美國製造的 Skycopter 也為我們帶來一些很好的機會，能在當下就取得檢測營收；你們也會持續看到——希望我們能像與 NASA 合作那樣，繼續拿下更多勝利。而遠端駕駛能力給了我們巨大的優勢，而且我們也是美國製造。所以我認為你們會看到 Skypersonic 穩健成長；至於一旦我們開始看到基礎建設資金到位之後會發生什麼，我們還不確定。

Okay, thank you. And the Fat Shark development of the digital system, is there a timeframe for that?

好的，謝謝。那 Fat Shark 的數位系統開發，有沒有時間表？

Yes, well, they have versions of it now. It's continuing to be improved and continue to get better features and continue to get updates. The system is amazing. It's very low latency, much lower latency than the Chinese competitor, its goggles set for FPV. So we are out there selling it now and we are starting to finally see -- as I mentioned in my remarks, we are starting to see people switch from the analog platforms to the digital platforms.

有的，他們現在已經有版本了。它持續在改良、持續加入更好的功能、也持續更新。這套系統非常驚人，延遲非常低，比中國競爭對手的 FPV 護目鏡系統低很多。所以我們現在就在市場上銷售，而且我們終於開始看到——如同我在發言中提到的——人們開始從類比平台轉換到數位平台。

So that's a great stage because the analog systems work, the Fat Shark goggles are very well made, so they last a long time. So people don't really have to replace them all the time. But now that we are seeing about 50% of the people coming on board are using -- are switching to digital, and hopefully we can see that conversion rate go up, then the HD system will continue to get traction throughout the year.

所以這是一個很好的階段，因為類比系統本來就能用，Fat Shark 護目鏡的做工也非常好，所以使用壽命很長。人們其實不需要一直更換。但現在我們看到大約 50% 的新加入用戶正在使用——正在轉換到數位；如果我們能看到這個轉換率提高，那 HD 系統在今年就會持續獲得市場動能。

And two other questions if you don't mind. Has the chip issue been resolved for Teal? And then secondly or lastly, I know you can't comment on the tranche two status, but can you at least reference if the government has not eliminated Teal from the consideration at this point?

如果你不介意，我還有兩個問題。Teal 的晶片問題解決了嗎？其次或最後，我知道你不能評論 tranche two 的狀態，但你至少可以提一下，政府目前是否尚未把 Teal 從考量名單中排除？

Oh, absolutely not. Teal is not eliminated from the process. We continue to work with them, which is -- we are pretty excited about, but again, we don't have anything to report there. And I'm sorry, what was the other question? I didn't get that.

喔，當然沒有。Teal 並沒有被排除在流程之外。我們持續與他們合作，這——讓我們相當興奮，但同樣地，我們目前沒有任何可以對外報告的內容。抱歉，另一個問題是什麼？我沒有聽清楚。

The chip -- for production for Teal. Last conference, I believe, there was an issue securing chips. I think you only had 600. Has that chip issue been resolved for manufacturing purposes?

晶片——Teal 的生產。上次電話會議我記得有提到取得晶片有問題。我想你們當時只有 600 顆。這個晶片問題在製造方面解決了嗎？

Not completely, but we are starting to see relief in some chips coming in quicker than we had planned for. One of the bigger issues we were having last call was the batteries, which -- when I got my tour, I don't mean to go on a tangent here, but people don't realize how many features of the battery that we've designed, that Teal has designed. I mean, there's like 100 features in that smart battery. It is an amazing piece of technology.

還沒有完全解決，但我們開始看到部分晶片的供應有緩解，進貨速度比我們原先規劃的更快。上次電話會議我們遇到的較大問題之一其實是電池——我在參觀時，不是要離題，但大家可能不知道我們設計、Teal 設計的電池有多少功能。我是說，那顆智慧電池大概有 100 個功能。那真的是一項令人驚嘆的技術。

But we have that resolved, and we are starting to see some relief going into the -- all of the supply chain constraints. But not every single chipset is perfectly available. So we -- our team was actually very forward -- and mostly Allan Evans, our COO, really pushed us to make sure we ordered early to get in the front of the line. And that's worked out really well. So we don't think that we will be constrained as we are building up our monthly build capability. But we think that we will be fine and we will get through this chip shortage.

但那部分我們已經解決了，而且我們也開始看到——整體供應鏈限制正在緩解。不過並不是每一種晶片組都能完全順利取得。所以我們——我們的團隊其實非常超前部署——主要是我們的營運長 Allan Evans，真的推動我們確保提早下單、排到隊伍前面。這個策略效果很好。所以我們認為，隨著我們提升每月產能，我們不會像之前那樣受到限制。我們認為我們會沒問題，並且能度過這次晶片短缺。

Okay, thank you very much.

好的，非常感謝。

[Dan Fan], private investor.

[Dan Fan]，私人投資人。

Hello, this is Dan. If you can hear me okay, congratulations on the growth in revenue and productivity from Teal Drones. Most of my questions have been answered, but I have one left. So given the supply chain have been relieved and there were a lot of proactive activities, I heard here, as far as getting those ready to produce more Teal Drones, that's the main revenue stream right now. My only question left is so what are we doing with the $60 million-plus or the significant amount of cash equivalent to continue with the growth in terms of investment for the short term or long term into next year?

你好，我是 Dan。如果你們聽得到我，恭喜 Teal Drones 在營收與生產力上的成長。我的大部分問題都已經得到回答，但我還有一個。既然供應鏈已經緩解，而且我也聽到你們做了很多前置作業，讓 Teal Drones 能準備好擴大生產——這也是目前主要的營收來源。我最後的問題是：我們要如何運用 6,000 萬美元以上、或這筆相當可觀的現金及約當現金，來在短期或長期（延伸到明年）持續投資以推動成長？

Yes, that's a great question. Yes. So first of all, let me back up a little bit. So if we get one of the large government contracts, it could be for tens of millions of dollars, if not, $50 million or $100 million over five years of drones orders, which means we've got to -- we would need to put a good chunk of capital to work. That's the reason that we raised the money in July is to have the capital to be able to: A, build out a factory that can handle the actual requests for a large contract, we could actually build what we are quoting; and then to be able to have the actual capital to buy all the parts to fill such a large order.

是的，這是個很好的問題。是的。首先我先稍微往回說一下。如果我們拿到某個大型政府合約，金額可能是數千萬美元，甚至在五年內的無人機訂單可能達到 5,000 萬或 1 億美元，這代表我們必須——我們需要投入相當一部分資本運作。這也是我們在 7 月募資的原因：為了有資本能夠做到：A，擴建能夠承接大型合約實際需求的工廠，確保我們能生產出我們報價承諾的數量；以及能夠有足夠資本去採購所有零組件，以完成如此龐大的訂單。

We are also just at the beginning of building our enterprise sales team, and we are not fully -- we don't have all the employees that we are looking to get. We are hiring. We had about 10 hirers that were looking just for Teal. And then the sales team probably has five or six people over the next year that we will be filling in with high-quality biz dev and sales folks. So we will be investing in our sales and marketing and manufacturing, customer service, all the things that we are going to need to be able to supply these large government contracts with good service -- and possible other acquisitions.

我們也才剛開始建立企業銷售團隊，而且我們還沒有——我們還沒招募到所有我們想要的人。我們正在招募。光是 Teal 這邊，我們就大約有 10 個職缺在找人。接著銷售團隊方面，未來一年大概還會補進五到六位高品質的商務開發與銷售人才。所以我們會投資在銷售與行銷、製造、客服，以及所有我們為了能以良好服務供應這些大型政府合約所需要的事情——以及可能的其他併購。

Okay, then that was my next question -- if there was any other acquisition, either plans or make us more competitive in this field.

好的，那就是我下一個問題——是否有任何其他併購，不論是計畫中或能讓我們在這個領域更具競爭力的。

Yes, most of the -- anything that we are looking at right now, as I mentioned on the last call, is mostly software-driven that would help the Teal platform.

是的，我們目前在看的——如同我在上次電話會議提到的——多半是以軟體為主，能夠幫助 Teal 平台的項目。

Got it. Thank you very much.

了解了。非常感謝。

Great, thanks for your questions.

很好，謝謝你的提問。

This concludes our question-and-answer session. I would like to turn the call back over to Jeff Thompson for any closing remarks.

問答環節到此結束。我想把電話會議交回給 Jeff Thompson，請他做任何結語。

Great, thanks. I just want to thank all the employees at Red Cat. We've got an incredible team. I was able to go out and see the folks at Teal. My next quest is to get up and see the folks at Skypersonic. They're doing a great job. I'm at Rotor Riot all the time (laughter). So we are pretty darn excited about this next -- the year, calendar year. We have a weird yearend for our fiscal year. But we are very excited. I want to thank all the employees. I want to thank our customers. And I want everyone to have a great Christmas, Merry Christmas.

很好，謝謝。我只想感謝 Red Cat 的所有員工。我們有一支非常出色的團隊。我有機會去拜訪並見到 Teal 的同仁。我下一個任務是上去看看 Skypersonic 的同仁，他們做得很棒。我也常常在 Rotor Riot（笑聲）。所以我們對接下來——這一年、這個曆年——感到非常興奮。我們的會計年度年結有點特別，但我們非常期待。我要感謝所有員工，感謝我們的客戶，也祝大家聖誕節愉快，聖誕快樂。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

本次電話會議已結束。感謝您參加今天的簡報。您現在可以掛線。