Red Cat Holdings Inc (RCAT) 2023 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Good morning and welcome to the Red Cat Holdings' fiscal 2023 first-quarter financial results and corporate update conference call. At this time, all participants are in a listen-only mode. (Operator Instructions)

各位女士、先生，感謝您稍候。早安，歡迎參加 Red Cat Holdings 2023 會計年度第一季財務業績與公司最新進展電話會議。目前所有與會者皆處於僅收聽模式。（接線員指示）

Participants of this call are advised that the audio of this conference call is being broadcast live over the internet and is also being recorded for playback purposes. A webcast replay of the call will be available approximately one hour after the end of the call through December 12, 2022.

提醒本次電話會議的與會者，本次電話會議的音訊正透過網際網路進行即時直播，並同時錄音以供回放。電話會議結束後約一小時起至 2022 年 12 月 12 日止，將提供網路直播重播。

I would now like to turn the call over to Mr. Joey Delahoussaye, Vice President of Core IR the company's investor relations firm. Please go ahead, sir.

現在我想把電話交給 Core IR（本公司投資人關係顧問公司）副總裁 Joey Delahoussaye 先生。先生，請開始。

Thank you, Andrew. Good morning, everyone, and thank you for joining us for the Red Cat Holdings' fiscal 2023 first-quarter financial results and corporate update conference call. Joining us today from Red Cat Holdings are Jeff Thompson, Chief Executive Officer; and Joseph Hernon, Chief Financial Officer.

謝謝你，Andrew。各位早安，感謝各位參加 Red Cat Holdings 2023 會計年度第一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 代表包括：執行長 Jeff Thompson，以及財務長 Joseph Hernon。

During this call, management will be making forward-looking statements including statements that address Red Cat's expectations for future performance or 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 and Form 10-Q and in Red Cat's press release that accompanies this call particularly the cautionary statements in it.

在本次電話會議中，管理團隊將作出前瞻性陳述，包括涉及 Red Cat 對未來表現或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 與 Form 10-Q 定期報告中所述的風險因素，以及隨本次電話會議一併發布之 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, September 12, 2022. 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.

本次電話會議內容包含具時效性的資訊，僅截至今日（2022 年 9 月 12 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。

It is now my pleasure to turn the call over to Jeff Thompson, Chief Executive Officer. Jeff?

現在我很高興把電話交給執行長 Jeff Thompson。Jeff？

Thanks, Joey. And thank you. Welcome to our first-quarter fiscal year 2023 earnings conference call.

謝謝你，Joey。也謝謝各位。歡迎參加我們 2023 會計年度第一季財報電話會議。

This is an exciting conference call for Red Cat. This is the first quarter with organic revenue from Teal Drones' production line in Fat Shark digital goggles. I will start with summaries of each subsidiary including progress on the Army Tranche 2 program and high-level status on requests for proposals across the globe.

對 Red Cat 而言，這是一場令人振奮的電話會議。這是 Teal Drones 生產線帶來有機營收的第一個季度，同時也包含 Fat Shark 數位護目鏡的生產。我將先概述各子公司近況，包括陸軍 Tranche 2 計畫的進展，以及全球各地招標提案（RFP）的整體狀態。

So let me start with Rotor Riot. Rotor Riot continues to improve revenue and margins and is just starting to see in-person community events like quads and coffee return. In-person events are similar to music concerts that promote a record release.

那我先從 Rotor Riot 開始。Rotor Riot 持續改善營收與毛利率，並且剛開始看到像「quads and coffee」這類線下社群活動回歸。線下活動類似音樂演唱會，用來推廣新專輯發行。

Rotor Riot had a record quarter. And with a new digital advertising campaign, new digital goggle launches should provide tailwinds for the consumer segment for the next 12 to 18 months.

Rotor Riot 創下創紀錄的一季。隨著新的數位廣告活動推出，以及新的數位護目鏡上市，預期將在未來 12 到 18 個月為消費者市場帶來順風助力。

Let's now talk about Fat Shark. In Q1, Fat Shark launched the new headset and saw the largest pre-order first-day sales of any headset to date. And Fat Shark has been around since 2007. The Dominator headset is getting great reviews, and we hope to see follow-through for the next few quarters.

接著談 Fat Shark。第一季 Fat Shark 推出新的頭戴式裝置，並創下歷來所有頭戴式裝置中首日預購銷售最高紀錄。Fat Shark 自 2007 年成立至今。Dominator 頭戴式裝置獲得非常好的評價，我們希望未來幾季能持續帶動銷售。

Skypersonic. The Skycopter drone can be piloted virtually anywhere -- from virtually anywhere. As the Skypersonic team recently demonstrated on Mt. Etna in July using Skypersonic's long-range real-time remote piloting system, the drone on an active volcano in Italy was controlled by personnel in Houston, Texas in real-time. Whereas most drones cannot be piloted without connecting to the GPS network, Skycopter uses technology that is able to control and track the drone in locations such as Mars, where GPS is not available.

Skypersonic。Skycopter 無人機幾乎可在任何地方進行遠端操控——從幾乎任何地方。正如 Skypersonic 團隊近期於 7 月在埃特納火山（Mt. Etna）所示範，透過 Skypersonic 的長距離即時遠端駕駛系統，位於義大利活火山上的無人機由美國德州休士頓的人員即時操控。多數無人機若未連接 GPS 網路便無法操控，而 Skycopter 採用的技術可在沒有 GPS 的地點（例如火星）控制並追蹤無人機。

We believe the Skycopter will be a leader in infrastructure inspections next year. But we also believe that technology can be very useful on the battlefield and for first responders. Being able to fly indoors, in caves, and tunnels in GPS-denied locations is game changing not only for infrastructure inspections, but also for the dismounted warfighter.

我們相信 Skycopter 將在明年成為基礎設施檢測領域的領導者。但我們也相信，這項技術在戰場與第一線應變人員的任務中非常有用。能在室內、洞穴與隧道等 GPS 受阻環境中飛行，不僅對基礎設施檢測具有革命性意義，對下車作戰的士兵同樣是改變遊戲規則的能力。

And now, I'll talk about Teal Drones. Let's start with the production line. We are currently switching from PVT, production validation tests, to ramp in mass production. Mass production enables Teal to continue to improve ongoing yields, qualify additional tools or vendors, make design changes based on customer feedback, any early field failures, or cost down efforts.

接下來我談 Teal Drones。先從生產線開始。我們目前正從 PVT（生產驗證測試）切換，並逐步提升至量產。量產使 Teal 能持續提升良率、認證更多工具或供應商，並可依客戶回饋、任何早期現場故障或降本措施進行設計變更。

We have significant design improvements as we go into mass production specifically the camera payload. We believe that having a made-in-USA factory up and running at mass production is strategic advantage for the RFPs we are working on and the Tranche 2 production contract.

在進入量產時，我們有顯著的設計改良，特別是在相機載荷方面。我們相信，擁有一座「美國製造」且已投入量產運作的工廠，將成為我們正在推進的各項 RFP 以及 Tranche 2 量產合約的策略優勢。

That brings us to SRR Tranche 2, short range reconnaissance program for the Army and the DIU. Teal Drones continues to meet the scheduled milestones for the Tranche 2 prototype design and expect to have a flying prototype by the end of the calendar year. The Tranche 2 production contract is still expected early in the first half of next year.

這也帶到 SRR Tranche 2，也就是陸軍與 DIU 的短程偵察（Short Range Reconnaissance）計畫。Teal Drones 持續按期達成 Tranche 2 原型設計的里程碑，並預期在本曆年年底前完成可飛行的原型機。Tranche 2 量產合約仍預期在明年上半年初期敲定。

Now, let me talk about some of the potential sales pipeline for the Golden Eagle. We are fielding multiple requests for proposals, RFPs, with NATO allies for the Teal Golden Eagle and the Skypersonic Skycopter. We continue to work with these customers and prospective customers to translate their interest into firm purchase orders and contracts.

接著我談 Golden Eagle 的潛在銷售管線。我們正針對 Teal Golden Eagle 與 Skypersonic Skycopter，處理多項來自北約盟國的招標提案（RFP）。我們持續與這些客戶及潛在客戶合作，將其興趣轉化為確定的採購訂單與合約。

We are seeing many opportunities and demand growing. We believe this will set Red Cat up for a strong fiscal 2023.

我們看到許多機會，需求也在成長。我們相信這將使 Red Cat 在 2023 會計年度具備強勁表現的基礎。

In summary, we have new products, new software capabilities, a new production facility, and organic growth from Rotor Riot, Fat Shark, and Teal Drones; and expect the Skycopter, our least-mature product, to be very important revenue generator next year. We have much to do, but we are close to firing on all cylinders.

總結來說，我們擁有新產品、新軟體能力、新的生產設施，以及來自 Rotor Riot、Fat Shark 與 Teal Drones 的有機成長；並預期 Skycopter（我們成熟度最低的產品）將在明年成為非常重要的營收來源。我們還有很多工作要做，但我們已接近全面火力全開。

And with that, I will hand the call over to Joseph, our CFO.

接下來我把電話交給我們的財務長 Joseph。

Thank you, Jeff, and to everyone for joining the call today. I will now provide a review of our financial results for the first quarter of fiscal 2023, which ended on July 31, 2022.

謝謝你，Jeff，也謝謝各位今天加入本次電話會議。接下來我將回顧我們 2023 會計年度第一季（截至 2022 年 7 月 31 日止）的財務結果。

I am very pleased to confirm that fiscal '23 is off to a resounding start as revenues for the first quarter totaled $3.1 million, which represents 120% growth compared to the first quarter of fiscal 2022. Another comparative measure of the strength of the quarter is that revenues for the first quarter of fiscal '23 equaled almost half or 48% of our revenues for the full year of fiscal 2022.

我非常高興確認，2023 會計年度開局強勁：第一季營收合計 310 萬美元，較 2022 會計年度第一季成長 120%。另一個衡量本季強勁程度的比較指標是，2023 會計年度第一季營收幾乎等同於 2022 會計年度全年營收的一半，亦即 48%。

Q1 revenue growth was led by strong shipments of the Dominator, the new digital goggle released by Fat Shark. In addition, revenues for Teal continue to grow even as we spend much of our focus on completing its manufacturing capacity expansion. Looking forward, we remain confident that we will deliver strong revenue growth in fiscal '23.

第一季營收成長主要由 Fat Shark 推出的新款數位護目鏡 Dominator 強勁出貨所帶動。此外，即使我們將大量重心放在完成 Teal 製造產能擴張上，Teal 的營收仍持續成長。展望未來，我們仍有信心在 2023 會計年度實現強勁的營收成長。

Operating expenses increased significantly in Q1 of fiscal '23, totaling $4.1 million compared to $1.8 million for the first quarter of fiscal '22. This increase was planned and expected, and primarily relates to the acquisition of Teal Drones, which occurred after the end of the first quarter of fiscal '22.

2023 會計年度第一季營業費用大幅增加，合計 410 萬美元，相較 2022 會計年度第一季的 180 萬美元。此增幅為計畫內且符合預期，主要與收購 Teal Drones 有關；該收購發生在 2022 會計年度第一季結束之後。

Since acquiring Teal in August of 2022, we have invested significantly in building out the Teal organization and preparing Teal for the multitude of revenue opportunities that are emerging. We have doubled the size of its facilities both to increase its manufacturing capacity and to house its workforce, which has increased significantly since we acquired Teal. While this strategy adversely impacts short-term operating results, it is necessary to position us to take advantage of much larger long-term growth opportunities.

自 2022 年 8 月收購 Teal 以來，我們已大幅投資於建置 Teal 組織，並為 Teal 做好準備，以把握正在浮現的眾多營收機會。我們將其設施面積擴增一倍，以同時提升製造產能並容納其人力；自我們收購 Teal 以來，其員工規模已顯著增加。雖然此策略對短期營運結果造成不利影響，但為了讓我們能把握更大規模的長期成長機會，這是必要的。

As expected, other income and expenses in the first quarter of fiscal '23 was minimal compared to some of the large and fluctuating amounts that we reported in prior quarters. Most of these variable charges related to derivative features that were embedded in convertible notes and warrants that we issued in fiscal 2021. These derivative expenses and income are non-cash charges that are highly correlated to changes in our stock price.

如預期，2023 會計年度第一季的其他收益與費用相較於我們在前幾季所報告的一些大額且波動的金額而言相當有限。這些波動性費用多與我們在 2021 會計年度發行的可轉換票據與認股權證中所嵌入的衍生性商品特徵相關。這些衍生性商品費用與收益屬非現金項目，且與我們股價變動高度相關。

To date, all of the notes have been converted into common stock and approximately 25% of the warrants have been exercised. As a result, future amounts related to these derivative features are expected to continue to be modest.

截至目前，所有票據均已轉換為普通股，且約 25% 的認股權證已被行使。因此，未來與這些衍生性商品特徵相關的金額預期將持續維持在較小的水準。

Our net loss for the first quarter of fiscal '23 totaled $3.8 million or $0.07 per share compared to $1.6 million or $0.05 per share for the first quarter of fiscal '22. Cash used in operations totaled $4.8 million in Q1 of '23 compared to $4.1 million in Q1 of '22. A key driver of our cash burn, in addition to building the Teal organization, has been building inventory levels, which totaled $6.4 million at the end of the first fiscal quarter of '23.

我們在 2023 會計年度第一季的淨虧損為 380 萬美元，或每股 0.07 美元，相較於 2022 會計年度第一季的 160 萬美元，或每股 0.05 美元。2023 年第一季營運活動使用的現金合計 480 萬美元，相較於 2022 年第一季的 410 萬美元。除建立 Teal 組織之外，我們現金消耗的一個關鍵驅動因素是提高庫存水位；截至 2023 會計年度第一季末，庫存合計 640 萬美元。

These higher-than-normal inventory balances can be partly attributed to the supply chain issues including the availability of computer chips, which are essential to many of our products. In addition, we have increased inventory levels to support the launch of the Dominator by Fat Shark and forecast sales growth for Teal.

這些高於正常水準的庫存餘額，部分可歸因於供應鏈問題，包括電腦晶片的供應情況，而晶片對我們許多產品而言至關重要。此外，我們也提高庫存水位，以支援 Fat Shark 推出的 Dominator 上市，以及因應 Teal 的預測銷售成長。

We ended the first quarter of fiscal '23 with almost $43 million in cash and marketable securities and less than $2 million in debt. We remain in a strong financial position to execute on our growth initiatives.

截至 2023 會計年度第一季末，我們持有將近 4,300 萬美元的現金及有價證券，且負債不到 200 萬美元。我們仍維持強健的財務狀況，以推動並落實我們的成長計畫。

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

接下來我把電話交給接線員進行提問。

(Operator Instructions) Ashok Kumar, ThinkEquity.

（接線員指示）Ashok Kumar，ThinkEquity。

Hello. And thank you, Jeff and Joseph. Congratulations. Two questions. One, you've applied to the NATO allies RFPs, can you please give us some color on size and potential? Second question is, any color on the Tranche 2? That would also be helpful. Thank you very much.

你好。也謝謝 Jeff 和 Joseph。恭喜。兩個問題。第一，你們已申請北約盟國的 RFP（招標/徵案），能否請你們提供一些規模與潛在機會的說明？第二個問題是，關於 Tranche 2（第二批次）有沒有任何進一步資訊？這也會很有幫助。非常感謝。

Great. Thanks, Ashok. Thanks for being on today. Yes. So we've -- our biz dev team has been demoing the Golden Eagle, as I have mentioned in previous calls, all over the globe.

很好。謝謝你，Ashok。謝謝你今天參與。是的，所以我們——如我在先前的電話會議中提到的——我們的業務開發團隊一直在全球各地展示 Golden Eagle。

And we have -- I actually was at a few of the events at USASOC down in Fort Bragg area recently. And we are getting some great feedback. And we have applied for a lot of RFPs to a lot of the Eastern European countries.

而且我們——我最近其實也在 Fort Bragg 一帶的 USASOC 參加了幾場活動。我們收到非常好的回饋。我們也已向許多東歐國家提交了大量 RFP 申請。

We have a couple for about 600 systems, some for 300 systems, and two for over 2,000 systems. So we don't expect to win every single deal. And some of them will probably be multi-vendor, but these are large, large possible proposals and contracts that we could win. And being a made-in-USA company and approved by the DoD, we think, gives us a strong position to do so.

其中有幾個案子約 600 套系統，有些約 300 套系統，還有兩個超過 2,000 套系統。因此我們不預期每一筆都能得標；其中一些可能也會是多家供應商共同供應。但這些都是非常、非常大的潛在提案與合約，我們有機會贏得。作為美國製造且獲國防部（DoD）核准的公司，我們認為這讓我們具備強勢的競爭位置。

So we are in the middle of some of these. We hope to -- couple of them, we hope to hear within about a month. And some of them go along in different stages, where we have already been down selected for first stage and are already in the second stage. So we don't give guidance yet. But we have probably close to over 3,500 drones, and we are in proposals right now.

所以我們目前正處於其中一些案子的進行中。我們希望——其中幾個案子，我們希望大約一個月內能收到消息。另一些則在不同階段推進，我們已在第一階段入選，並已進入第二階段。因此我們目前尚未提供指引。但我們現在正在進行中的提案，合計大概接近或超過 3,500 架無人機。

And on the Tranche 2 process, we've gotten through some of the hardest parts, which is the product requirements document, which has to be approved and make sure that the DIU, which is running a very tough process. But we are getting through those stages, and we are meeting the requirements of the drone that's being proposed for Tranche 2. And again, we are getting ourselves into mass production. If we win Tranche 2, we will be capable of basically hitting the ground running and produce this drone as quickly as possible.

至於 Tranche 2 的流程，我們已經通過一些最困難的部分，也就是產品需求文件（product requirements document），該文件必須獲得核准，並確保由 DIU 主導的流程——這是一個非常嚴格的流程——符合要求。但我們正在通過這些階段，且我們所提案用於 Tranche 2 的無人機也符合相關需求。同時，我們也正讓自己進入量產狀態。如果我們贏得 Tranche 2，我們基本上將能立即展開作業，並以最快速度生產這款無人機。

Great. Thank you very much and all the best.

很好。非常感謝，祝一切順利。

Great. Thank you.

很好。謝謝你。

(Operator Instructions) Kevin Dede with HC Wainwright.

（接線員指示）HC Wainwright 的 Kevin Dede。

Good morning, Jeff, Joe. How are you guys doing?

早安，Jeff、Joe。你們近況如何？

Hey, Kevin. It sounds like you are at the conference already. We assume.

嗨，Kevin。聽起來你已經在會場了。我們猜是這樣。

Yes, I am. I apologize for the background noise. Looking forward to having you here. I think -- listen, Joe, I know you spent a lot of time reviewing the organic versus acquisitive contribution to sales, but could you just speak specifically to the fourth quarter to first quarter change please? You lost me a little bit on the Teal side.

是的，我在。抱歉有背景噪音。期待你們過來。我想——聽著，Joe，我知道你花了很多時間檢視銷售中自然成長（organic）與併購帶來（acquisitive）的貢獻，但你能否具體談談第四季到第一季的變化？我在 Teal 那一段有點跟不上。

Yeah. Teal revenue so far, Kevin, has been pretty modest. It's growing gradually. It was almost all of the enterprise revenue in the first quarter. So it was about $1 million in the first quarter.

好的。Kevin，就目前而言，Teal 的營收相當有限，正在逐步成長。第一季幾乎所有的企業端（enterprise）營收都來自 Teal。所以第一季大約是 100 萬美元。

Consumer accounted for about two-thirds of the revenue in the first quarter, and that was split pretty even between Fat Shark and Rotor Riot. And consumer continues to get closer to operating breakeven. So we expect Teal revenue to continue to gradually increase, but it's coming off of a fairly low base number. Right now, I don't have a breakout of the Q4 revenues, but I can say that the growth, the sequential growth, was largely driven by consumer, although enterprise did help a little bit.

第一季消費端（consumer）約占營收的三分之二，而這部分在 Fat Shark 與 Rotor Riot 之間大致各半。消費端也持續更接近營運損益兩平。因此我們預期 Teal 營收會持續逐步增加，但它是從相當低的基期起步。目前我沒有第四季營收的拆分數字，但我可以說，序列成長（sequential growth）主要由消費端帶動，企業端也有些許助益。

Okay. So consumer two-thirds of the $3 million? Roughly $3 million?

了解。所以消費端是 300 萬美元中的三分之二？大約 300 萬美元？

Yes.

是的。

Okay. And then the balance roughly Teal?

好的。那剩下的部分大致就是 Teal？

Almost all Teal. Skypersonic was negligible.

幾乎全部都是 Teal。Skypersonic 的占比可以忽略不計。

Okay. Okay.

好。好。

And one of the things -- Kevin, just so you know, one of the things we are doing beginning with the first quarter of this year is we are reporting on a segment basis, so that information will also be in our 10-Q.

另外，Kevin，讓你知道一下，我們從今年第一季開始會以事業部（segment）為基礎進行揭露，因此這些資訊也會出現在我們的 10-Q 裡。

Oh, awesome. Okay. How about progress update on construction of the manufacturing facilities? Just to look into material sourcing and your comfort and meeting timeline.

喔，太棒了。好。那製造設施的建置進度如何？特別是材料採購，以及你們對於如期達成時程的把握度。

Yeah. That's a great question, specifically, how manufacturing is so crucial to Teal continuing to grow. And just to add a comment to what Joseph just mentioned, is we basically went from almost zero revenue to a $1 million in revenue for Teal in just one quarter and being the first couple of months of the factory getting up online.

是的，這是個很好的問題，尤其製造對 Teal 持續成長至關重要。再補充 Joseph 剛才提到的一點：我們基本上在短短一季內，就讓 Teal 從幾乎零營收提升到 100 萬美元營收，而那也只是工廠上線後的前一兩個月。

So that's a very early-stage production line, which is now maturing. And as I mentioned in some of my comments in my -- the press releases that we are now going from PVT to mass production and ramp, which we take all the things that we learned from the PVT stage. And now we basically fix any issues and problems in vendors and tooling that we want to do to automate production line so that we can really scale it as we -- if we get any of these RFPs, we're going to have to start producing a lot of drones very quickly.

所以那是一條非常早期階段的產線，現在正在成熟。我也在我——新聞稿中的一些評論提到，我們正從 PVT（生產驗證測試）走向量產與爬坡（ramp）。我們會把在 PVT 階段學到的所有事情帶進來，接著基本上修正供應商與治具（tooling）上的任何問題，並推動產線自動化，讓我們能真正擴大規模；因為如果我們拿到任何這些 RFP，我們就必須非常快速地開始大量生產無人機。

So we are pretty good with -- there are some components we are still having some tough times with in the supply chain. We think we have almost all of that resolved currently. Still cautious, but we did a lot of ordering. And thanks to the Teal team and Dr. Evans for getting us to put orders in last year.

所以整體而言我們做得不錯——供應鏈上仍有一些零組件我們還在面臨較大挑戰。我們認為目前幾乎都已解決。仍然保持謹慎，但我們做了大量下單。也要感謝 Teal 團隊與 Evans 博士，促使我們在去年就先行下單。

We are in pretty good shape with our supply chain and chipsets to be able to continue to ramp Teal's revenue from where it was two quarters ago, basically zero to a $1 million to pretty dramatic revenue growth over the next few quarters, so -- but yeah, the production is getting there.

在供應鏈與晶片組方面，我們的狀況相當不錯，足以持續推升 Teal 的營收爬坡：從兩季前基本上是零，到 100 萬美元，並在接下來幾季實現相當顯著的營收成長——所以，是的，產能正在到位。

It's not -- the factory, as Joseph mentioned, is also we doubled it in size. Right away, as we started building, we realized we needed more. And so that's where we are right now with manufacturing.

這不是——如 Joseph 提到的，我們也把工廠面積擴大了一倍。一開始建置時我們就立刻意識到需要更多空間。所以目前製造端就是這樣的狀況。

Yes. So you were -- I remember speaking with you last time, and you were still working through the construction of the facility. Now, where are you with regard to that? Is that -- the addition there, has that been complete?

是的。所以——我記得上次跟你談時，你們還在處理設施的施工。那現在進度如何？那個擴建部分完成了嗎？

Yeah. No, the addition is -- so I will give you exactly where it is. So we have a complete, same size, location right next to the first location that we opened. We have the production line up and running.

是的。沒有，擴建部分——我給你最精確的狀態。我們在第一個據點旁邊，新增了一個同樣大小、相鄰的位置。我們的產線已經架設完成並在運作。

And then we decided to -- basically, we had to open up a wall and bring the other side in, which will -- because we have a lot of inventory control capabilities inside the facility. Specifically, when you are selling to the military, it has to be very secure.

然後我們決定——基本上，我們必須打通一面牆，把另一側納入，因為我們在設施內有很多庫存控管能力。特別是當你向軍方銷售時，必須非常安全。

So we have to open up the other side. And sometimes, that slows down the existing production line, because of all the construction dust and things of that nature. We hope to have the construction done in the next month or two and put this behind us. And that will also bring us into full-mass production.

所以我們必須把另一側打通。有時候，因為施工粉塵等因素，會讓既有產線的運作稍微放慢。我們希望在接下來一到兩個月內完成施工，把這件事告一段落。這也會讓我們進入全面量產。

Can you peel the onion back a little bit on DoD contracts? Are your drones expected to be weaponized? And is that an additional level of security and process?

您能否更深入地談談國防部（DoD）合約？你們的無人機是否預期會武器化？這是否會帶來額外一層的安全要求與流程？

Yes. So it's the difficult thing that's happening right now. With the Ukraine war going on, it's people are realizing that small drones are so crucial for warfare.

是的。所以這就是目前正在發生的棘手之處。隨著烏克蘭戰爭持續，人們開始意識到小型無人機對於戰爭是如此關鍵。

I mean, you even saw the Fat Shark goggles, if you Google it, are being used for the 93rd Brigade in the Ukraine to use racing drones for small racing drones with kinetics on them. Fat Sharks, also looking at ways to make sure that the new Dominator goggle can be mounted on a warfighter's helmet and have the proper antenna placement for things of that nature.

我的意思是，你甚至看到 Fat Shark 護目鏡——如果你去 Google——正被烏克蘭第 93 旅用來操作競速無人機，讓小型競速無人機搭載動能武器。Fat Shark 也在研究如何確保新的 Dominator 護目鏡能夠安裝在戰鬥人員的頭盔上，並具備適當的天線配置等這類需求。

And the next step where you see kinetics put on any drone that we make, that is a very lengthy process to get approved to do that. If we -- there are RFPs out there for drones with kinetics on there. And if they want to use the Golden Eagle, we would partner with someone that's already approved and gone through the two-year process to do so.

而下一步，如果你看到我們製造的任何無人機要加裝動能武器，那將是一個非常漫長的核准流程才能獲准這麼做。如果我們——目前確實有一些針對搭載動能武器的無人機的 RFP（招標需求）在外面。如果他們想使用 Golden Eagle，我們會與已經獲准、並且走完兩年流程的合作夥伴一起合作來完成。

But on top of that, we have been working very closely. I was recently at the -- last time we spoke, I was a few weeks away from going to USASOC to demo the 4-Ship product. And the Reveal partnership we recently announced, where we actually demonstrated how to go, look at the target, surround the target, get real warfighter information to be able to give them an easy journey to that target without being seen through knowing where line of sight, where non-line of sight, things of that nature. A lot of data can be derived from our 4-Ship products and the reconnaissance that it can do.

除此之外，我們一直非常密切地合作。我最近去了——上次我們談話時，我還有幾週就要去 USASOC 展示 4-Ship 產品。而我們最近宣布的 Reveal 合作夥伴關係中，我們實際展示了如何前往、觀察目標、包圍目標，並取得真正的戰鬥人員資訊，讓他們能夠在不被發現的情況下，更容易地抵達該目標——透過了解哪裡是視距（line of sight）、哪裡是非視距（non-line of sight）等這類資訊。我們的 4-Ship 產品以及其可執行的偵察，能衍生出大量數據。

And then there is -- the next step is how do you take small drones like class one drones to be a even more lethal product for the warfighter. So we are not there yet. But we are helping the other technologies that are out there that are taking out tanks, like the Switchblade and things of that nature. So we are trying to help the warfighter with as many tools as we can give them to help them and mitigate their safety.

接下來就是——你要如何讓像一級（class one）這種小型無人機，成為對戰鬥人員更具殺傷力的產品。所以我們還沒到那一步。但我們正在協助其他已存在、能摧毀坦克的技術，例如 Switchblade 等等。因此，我們正試著盡可能提供戰鬥人員更多工具，來協助他們並降低其安全風險。

So I did see that. I may have sent you the link when I saw it actually, when the 93rd used the Fat Shark --

所以我確實看到了那個。我看到時可能還把連結傳給你了，當第 93 旅使用 Fat Shark——

Oh, yeah. You did. Yes, you sent --

喔，是的。你有。是的，你傳了——

Yeah. So I saw that. But I got the sense that that was sort of an after-market modification, right? Am I right with that assumption?

對。所以我看到了。但我的感覺是，那有點像是後市場改裝，對吧？我這樣假設對嗎？

Yes. That was an after-market application, where people are typically putting a specific grenade, that when it smashes into the facilities, and the grenade goes out. But there are some upcoming RFPs for one-way kinetic class one drones. There's also some RFPs with armed drones that have -- would have a six-shooter on them, reloadable. So there is a completely different world of new class one drones coming out over the next year or two.

是的。那是後市場的應用，人們通常會裝上一種特定的手榴彈，當它撞擊到設施時，手榴彈就會釋放。但接下來會有一些針對一次性動能一級無人機的 RFP。也有一些 RFP 是針對武裝無人機——可能會在上面裝一個可重新裝填的六連發裝置。因此，在未來一到兩年，將會出現一個完全不同的新一級無人機世界。

So you mentioned a partnership in helping you meet those milestones. Can you categorize where you might be in that negotiation process? Is there -- I don't know. Is there a milestone that we could look forward to hearing about and seeing how Red Cat is positioned to participate in that market?

所以你提到透過合作夥伴關係來協助你達成那些里程碑。你能否概括一下你們在該談判流程中可能處於什麼階段？是否——我不知道——有沒有一個我們可以期待聽到的里程碑，來看看 Red Cat 在參與該市場方面的定位？

So there is -- here is -- I will give you some short-term and long-term milestones, just to give everyone some goalposts on the call, not just specific to what you just asked.

所以有——這裡是——我會給你一些短期與長期的里程碑，讓電話會議上的每個人都有一些參考目標，不僅僅針對你剛剛問的那個。

But I think some of the short-term, we continue to work with Border Patrol on that $90 million contract we got in January. So on the short-term side, we hope to hear, talk about that shortly. Some of the RFPs I mentioned with some of the NATO allies, we think we are in a good position. We are on a couple of those.

但我認為一些短期方面，我們會持續與邊境巡邏隊（Border Patrol）就我們在一月拿到的 9,000 萬美元合約合作。所以在短期面，我們希望很快能聽到並談到那件事。我提到的一些與北約盟友相關的 RFP，我們認為我們處於有利位置。我們已經參與其中幾個。

So those are some of the short-term goals that we have. There are some other moon shots that we are looking at that are early next year. But then the next large milestone would be the Tranche 2 production contract in early next year.

所以這些是我們的一些短期目標。我們也在看一些明年初的「登月計畫」式機會。但接下來最大的里程碑，將是明年初的 Tranche 2 量產合約。

And the last production contract was for $100 million for Tranche 1, and that was before the Ukraine war broke out. And small class one drones are much more important now than they were when Tranche 2, two years ago, production contract was awarded.

而上一個量產合約是 Tranche 1 的 1 億美元，而且那是在烏克蘭戰爭爆發之前。如今，小型一級無人機的重要性，遠高於兩年前 Tranche 2 的量產合約被授予時的程度。

So those are the goalposts on milestones. In the short-term, it's mostly the RFPs. And the partners that we were talking about for the kinetics are based out of California. They've been doing it for years. When we have something to announce with them, we will make sure that the street is aware.

所以這些就是里程碑的參考點。短期來說，主要是那些 RFP。至於我們談到、用於動能武器的合作夥伴，位於加州，他們做這個很多年了。當我們有任何可以對外宣布的內容時，我們一定會讓市場知道。

Okay. The Tranche 2 deal, Joe, though -- Jeff, has not been awarded, just to confirm, and what's --

好的。不過 Tranche 2 的案子，Joe——Jeff，尚未被授予，對吧？只是確認一下，然後——

Yes. So let me -- yeah. This is some good housekeeping, because people get a little confused with it. It's a SRR, small range reconnaissance program. It's a three-tranche program, Tranche 1, Tranche 2, Tranche 3.

是的。所以讓我——對。這裡做一些釐清很重要，因為大家會有點混淆。這是一個 SRR（短距離偵察）計畫。它是一個三個 tranche 的計畫：Tranche 1、Tranche 2、Tranche 3。

Tranche 1 -- and each tranche has prototype contracts. And when you get a prototype contract, you are in the running to win a production contract.

Tranche 1——而且每個 tranche 都有原型（prototype）合約。當你拿到原型合約時，你就有機會競逐量產合約。

Tranche 1 was over two years ago. And Teal was one of the five companies that was selected to build a prototype, and they won a prototype contract. But Skydio was one of those five also, and they won the production contract two years ago.

Tranche 1 是兩年多以前。Teal 是被選中打造原型的五家公司之一，並且拿到了原型合約。但 Skydio 也是那五家之一，而他們在兩年前贏得了量產合約。

Tranche 2, there was 37 companies that applied and went and demoed their bird in Georgia. And two were selected for the prototype contracts. Of those two, one will win the production contract. And then the same process will happen for Tranche 3.

Tranche 2，有 37 家公司申請並到喬治亞州展示他們的機體。其中有兩家被選中獲得原型合約。在這兩家之中，將有一家贏得量產合約。然後 Tranche 3 也會走同樣的流程。

So we are very well positioned for Tranche 2, not only because of our financial condition, but also we'll be a mature production line by the time Tranche 2 is awarded. And we will have a -- and we think that our supply chain will be in really good shape by the time that contract is awarded.

所以我們在 Tranche 2 的定位非常好，不僅因為我們的財務狀況，也因為在 Tranche 2 授予時，我們將擁有成熟的量產產線。而且我們也認為，在該合約授予時，我們的供應鏈會處於非常良好的狀態。

Okay. Then -- apologies for hogging the call, Jeff. Just give us a little insight on the timeline for Tranche 3. And maybe your estimation, the size of that contract.

好的。那——抱歉我佔用太多時間，Jeff。請你稍微分享一下 Tranche 3 的時間表。以及你對該合約規模的估計。

Yes. So like I said Tranche 1 was $100 million. They don't really announce the sizes of Tranche 2 and Tranche 3. We expect Tranche 2 to be $100 million to $200 million based on the data that we have, but we have no way to verify that.

是的。所以如我所說，Tranche 1 是 1 億美元。他們其實不太會公布 Tranche 2 和 Tranche 3 的規模。根據我們掌握的資料，我們預期 Tranche 2 會是 1 億到 2 億美元，但我們無法驗證。

Tranche 3, we expect to continue to be as large as well. But Tranche 3 will not be announced. The timelines and dates is typically after the production for Tranche 2 is awarded.

Tranche 3，我們預期也會同樣大。但 Tranche 3 不會被宣布。其時間表與日期通常是在 Tranche 2 的量產合約授予之後才會出來。

Okay. Fair enough. Thank you. I appreciate all the color, gentlemen. Congrats on the progress. Thanks for having me.

好的。合理。謝謝。我很感謝各位提供的詳細說明，先生們。恭喜進展。謝謝讓我參與。

Thank you. Thanks, Kevin.

謝謝。謝謝你，Kevin。

(Operator Instructions) This concludes the question-and-answer session of the call. I would now return the call to CEO Jeff Thompson for closing remarks.

（接線員指示）本次電話會議的問答環節到此結束。現在我將把電話交回給執行長 Jeff Thompson 作結語。

Thanks, everybody, for joining the call. And I want to thank all the employees from all the different teams. You have done a great job over the last year. The finance team for getting earnings done early.

感謝各位參加電話會議。我也要感謝來自不同團隊的所有員工。你們在過去一年做得非常出色。也感謝財務團隊提前完成財報。

And I look forward to seeing a whole bunch of you, folks, today and tomorrow at the HC Wainwright conference. Thanks for joining.

我期待今天和明天在 HC Wainwright 會議上見到在座許多各位。感謝參與。

The conference has concluded. Thank you for attending. You may now disconnect your line.

本次會議已結束。感謝您的出席。您現在可以掛斷電話。