GLOBAL UAV TECHNOLOGIES — Interim / Quarterly Report 2022

Mar 30, 2022

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(A Technology Company)

Condensed Consolidated Interim Financial Statements

For the Three Months Ended January 31, 2022 and 2021

(UNAUDITED - Expressed in Canadian Dollars)

NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS

The accompanying unaudited interim financial statements have been prepared by management and approved by the Audit Committee and Board of Directors.

The Company’s independent auditors have not performed a review of these condensed consolidated interim financial statements in accordance with the standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity’s auditors.

This notice is being provided in accordance with National Instrument 51-102 – Continuous Disclosure Obligations.

Condensed Consolidated Interim Statements of Financial Position (Unaudited - Expressed in Canadian Dollars)

GLOBAL UAV TECHNOLOGIES LTD.

	January 31, 2022 October 31, 2021
ASSETS Current Cash Amounts receivable and prepaid expenses (Note 4) Non-current Equipment (Note 5)	$ 1,242 $ 9,989 27,411 27,066
	28,653 37,055 264,558 282,339
TOTAL ASSETS	$ 293,211 $ 319,394
LIABILITIES Current Accounts payable and accrued liabilities (Note 6) Non-current Loan payable (Note 7) TOTAL LIABILITIES SHAREHOLDERS’ DEFICIT Share capital (Note 8) Reserves Accumulated deficit	$ 1,323,647 $ 1,307,706 60,000 60,000
	1,383,647 1,367,706
	25,025,124 25,025,124 2,969,058 2,969,058 (29,084,618) (29,042,494)
	(1,090,436) (1,048,312)
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT	$ 293,211 $ 319,394

Nature of operations and going concern (Note 1)

Approved and authorized by the Board on March 28[th] , 2022

“James Rogers” (signed) ……………………………………...… Director “Andrew Male” (signed) …………………………………...…… Director

See notes to the consolidated financial statements

GLOBAL UAV TECHNOLOGIES LTD.

Condensed Consolidated Interim Statements of Operations and Comprehensive Loss (Unaudited - Expressed in Canadian Dollars)

	For the three months ended January 31, 2022 For the three months ended January 31, 2021
Revenues Lease of equipment Operating Expenses Accounting, audit and legal (Note 10) Automotive Consultants’ fees (Note 10) Depreciation (Notes 5) Insurance Investor relations and promotion Office and miscellaneous Regulatory, listing, transfer agent fees Rent Other Items Foreign exchange (loss) gain Gain on settlement of debt (Note 6 and 10) Net Loss and Comprehensive Loss for the Year	$ - $ 14,063
	16,768 20,997 - 401 1,584 16,115 17,781 24,411 792 2,317 180 780 573 8,664 3,200 3,915 1,050 1,575
	(41,928) (79,175) (196) 316 - 17,000
	(196) 17,316
	$ (42,124) $ (47,796)
Lossper Share, Basic and Diluted	$ (0.04) $ (0.05)
Weighted Average Number of Common Shares Outstanding	1,013,167 1,013,167

See notes to the consolidated financial statements

GLOBAL UAV TECHNOLOGIES LTD.

Condensed Consolidated Interim Statements of Changes in Shareholders’ Deficit (Unaudited - Expressed in Canadian Dollars)

Number of Shares	Share Capital	Reserves Equity Settled Share-based Payments Warrants Total Accumulated Deficit	Total Shareholders’ Deficit
Balance – October 31, 2020 1,013,167 Net loss for the period -	$ 25,025,124 -	$ 2,389,800 $ 579,258 $ 2,969,058 $ (29,184,260) - - - (47,797)	$ (1,190,078) (47,797)
Balance– January 31, 2021 1,013,167	25,025,124	2,389,800 579,258 2,969,058 (29,232,057)	(1,237,875)
Balance – October 31, 2021 1,013,167 Net loss for the period -	25,025,124 -	2,389,800 579,258 2,969,058 (29,042,494) - - - (42,124)	(1,048,312) (42,124)
Balance –January 31, 2022 1,013,167	$ 25,025,124	$ 2,389,800 $ 579,258 $ 2,969,058 $ (29,084,618)	$ (1,090,436)

See notes to the consolidated financial statements.

GLOBAL UAV TECHNOLOGIES LTD. Condensed Consolidated Interim Statements of Cash Flows (Unaudited - Expressed in Canadian Dollars)

	For the three months ended January 31, 2022 For the three months ended January 31, 2021
Operating Activities Net loss Items not affecting cash: Depreciation Gain on settlement of debt Changes in non-cash working capital: Amounts receivable Prepaid expenses Accounts payable and accrued liabilities Cash Provided by (Used in) Operating Activities Financing Activities Proceeds from loans Cash Provided by Financing Activities Change in Cash Cash, Beginning of Period Cash, End of Period	$ (42,124) $ (47,797) 17,781 24,411 - 17,000 (1,137) 1,477 792 (7,184) 15,941 35,433
	(8,747) 23,340
	- 20,000
	- 20,000
	(8,747) 43,340 9,989 66,851
	$ 1,242 $ 110,191

The Company did not enter into any non-cash transactions during the period ended January 31, 2022 and the period ended January 31, 2021

See notes to the condensed consolidated interim financial statements.

GLOBAL UAV TECHNOLOGIES LTD. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended January 31, 2022 and 2021 (Unaudited - Expressed in Canadian Dollars)

1. NATURE OF OPERATIONS AND GOING CONCERN

Global UAV Technologies Ltd. (the “Company”) was incorporated under the laws of British Columbia. The Company’s principal and registered place of business is located at 488 – 1090 West Georgia St., Vancouver, British Columbia, Canada, V6E 3V7. The Company is a technology issuer and is listed on the Canadian Securities Exchange under the symbol “UAV”.

During the year ended October 31, 2021, the Board of Directors authorized a 135-for-1 share consolidation. The number of issued and outstanding shares and all per share disclosures have been retrospectively restated for all periods presented unless otherwise stated.

The Company has sustained recurring losses and negative cash flows from its operations. As at January 31, 2022, the Company had cash of $1,242 (October 31, 2021 - $9,989), working capital deficit of $1,294,994 (October 31, 2021 – deficit of $1,270,651) and an accumulated deficit of $29,084,618 (October 31, 2021 - $29,042,494). The Company will need to raise additional capital to fund operations and settle its debts. The Company expects to seek additional funding through equity financing or the exercise of existing warrants. There can be no assurance as to the availability or terms upon which such financing might be available.

The ability of the Company to continue as a going concern and meet its commitments as they become due is dependent on the success of the Company’s wholly owned subsidiaries and/or the Company’s ability to obtain the necessary financing. If the Company is unable to obtain additional financing, the Company will be unable to finance itself to continue operations. There can be no assurance that management’s plans will be successful.

In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally. It has also disrupted the normal operations of many businesses, including the Company’s. This outbreak has decreased spending, limited travelling, adversely affecting demand for and the ability of the Company to provide its services. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or results of operations at this time.

These matters indicate the existence of material uncertainties that may cast significant doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern. Such adjustments could be material.

2. BASIS OF PRESENTATION

a) Statement of Compliance

These consolidated financial statements have been prepared and are presented in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”), and interpretations of the International Financial Reporting Interpretations Committee.

Basis of presentation

These consolidated financial statements have been prepared on a historical cost basis, except for financial instruments classified as fair value through profit or loss (“FVTPL”) or fair value through other comprehensive income (“FVOCI”), which are measured at fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

GLOBAL UAV TECHNOLOGIES LTD. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended January 31, 2022 and 2021 (Unaudited - Expressed in Canadian Dollars)

2. BASIS OF PRESENTATION (cont’d…)

b) Basis of consolidation

These consolidated financial statements include the accounts of the Company and the following subsidiaries:

		Percentage	owned*
Subsidiary		January 31, 2022	October	31, 2021
Pioneer Aerial Surveys Ltd.	Saskatchewan, Canada	100%		100%
High Eye Aerial Imaging Inc.	Ontario, Canada	100%		100%
UAV Regulatory Services Ltd.	BC, Canada	100%		100%
NOVAerial Robotics Ltd.	Ontario, Canada	100%		100%
Aerial Imaging Resources Inc.	Manitoba, Canada	100%		100%
Minera Alta Vista SA de CV	Mexico	100%		100%

*Percentage of voting power is proportion to ownership.

Subsidiaries are entities that the Company controls, either directly or indirectly. Control is defined as the exposure, or rights, to variable returns from involvement with an investee and the ability to affect those returns through power over the investee. Power over an investee exists when we have existing rights that give us the ability to direct the activities that significantly affect the investee’s returns. This control is generally evidenced through owning more than 50% of the voting rights or currently exercisable potential voting rights of a company’s share capital. All inter-company balances and transactions, including unrealized profits and losses arising from intra-group transactions, have been eliminated upon consolidation. Where necessary, adjustments are made to the results of the subsidiaries and entities to bring their accounting policies in line with those used by the Company.

c) Foreign currencies

• i) Presentation and functional currency

The presentation and functional currency of the Company and its subsidiaries is the Canadian dollar.

• ii) Foreign currency transactions

Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on the dates of the transactions. Monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at the date of the consolidated statement of financial position. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Gains and losses arising on foreign currency translations are included in net loss for the year.

d) Significant accounting judgments and estimates

The preparation of the consolidated financial statements using accounting policies consistent with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. The preparation of the consolidated financial statements also requires management to exercise judgment in the process of applying the accounting policies.

Critical accounting estimates

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized prospectively from the period in which the estimates are revised. The following are the key estimate and assumption uncertainties that have a significant risk of resulting in a material adjustment within the next financial year:

GLOBAL UAV TECHNOLOGIES LTD. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended January 31, 2022 and 2021 (Unaudited - Expressed in Canadian Dollars)

2. BASIS OF PRESENTATION (cont’d…)

e) Significant accounting judgments and estimates (cont’d…)

Share-based payments

Estimating fair value for granted stock options requires determining the most appropriate valuation model which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the option, volatility, dividend yield, and rate of forfeitures and making assumptions about them. The value of the share-based payment expense for the year along with the assumptions and model used for estimating fair value for share-based compensation transactions are disclosed in Note 8.

Critical judgments used in applying accounting policies

In the preparation of these consolidated financial statements management has made judgments, aside from those that involve estimates, in the process of applying the accounting policies. These judgments can have an effect on the amounts recognized in the consolidated financial statements.

Impairment of assets

When there are indications that an asset may be impaired, the Company is required to estimate the asset’s recoverable amount. The recoverable amount is the greater of value in use and fair value less costs to sell. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. Determining the value in use requires the Company to estimate expected future cash flows associated with the assets and a suitable discount rate in order to calculate present value.

For the period ended January 31, 2022, management determined that there were no indicators of impairment for its equipment held by Global UAV and its subsidiaries and recorded a write-down of $nil (2021 - $nil).

Mexico liabilities provision:

The Company recognizes a provision where it is probable that an outflow of resources embodying economic benefit is likely to be required to settle an obligation. During the year ended October 31, 2021, the Company recognized a recovery to reduce its outstanding provision associated with its inactive Mexican subsidiary to $nil. The recognition of this recovery involved judgement from management about the nature and likelihood of the associated provision.

Utilization of deferred income tax assets

In assessing the probability of realizing income tax assets, management makes estimates related to expectations of future taxable income, applicable tax opportunities, expected timing of reversals of existing temporary differences and the likelihood that tax positions taken will be sustained upon examination by applicable tax authorities.

Going concern

The assessment of the Company’s ability to continue as a going concern and to raise sufficient funds to pay its ongoing operating expenditures and meet its liabilities for the ensuing year, involves significant judgment based on historical experience and other factors including expectation of future events that are believed to be reasonable under the circumstances.

3. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies applied in preparation of these condensed consolidated interim financial statements are consistent with those applied and disclosed in the Company’s audited consolidated financial statements for the year ended October 31, 2021.

GLOBAL UAV TECHNOLOGIES LTD. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended January 31, 2022 and 2021 (Unaudited - Expressed in Canadian Dollars)

4. AMOUNTS RECEIVABLE AND PREPAIDS

Amounts receivable are comprised of the following:

January 31, 2022 Sales tax receivable $ 27,411 Prepaid expenses -	October 31, 2021 $ 26,274 792
Total amounts receivable $ 27,411	$ 27,066

GLOBAL UAV TECHNOLOGIES LTD. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended January 31, 2022 and 2021

(Unaudited - Expressed in Canadian Dollars)

5. EQUIPMENT

Vehicles Unmanned Aerial Vehicles Office Equipment Computer Software and Equipment Sensors	Total
COST
Balance, October 31, 2020, 2021 and January 31, 2022 $ 94,560 $ 437,138 $ 50,458 $ 106,404 $ 326,358	$ 1,014,918
ACCUMULATED DEPRECIATION
Balance, October 31, 2020 $ 30,165 $ 268,371 $ 50,458 $ 106,404 $ 182,377 Depreciation 11,718 37,557 - - 45,529	$ 637,775 94,804
Balance, October 31, 2021 41,883 305,928 50,458 106,404 227,906 Depreciation 2,450 7,511 - - 7,820	732,579 17,781
Balance, January 31, 2022 $ 44,333 $ 313,439 $ 50,458 $ 106,404 $ 235,726	$ 750,360
CARRYING AMOUNTS
At October 31, 2020 $ 64,395 $ 168,767 $ - $ - $ 143,981 At October 31, 2021 $ 52,677 $ 131,210 $ - $ - $ 98,452 AtJanuary 31, 2022 $ 50,227 $ 123,699 $ - $ - $ 90,632	$ 377,143 $ 282,339 $ 264,558

GLOBAL UAV TECHNOLOGIES LTD. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended January 31, 2022 and 2021 (Unaudited - Expressed in Canadian Dollars)

6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities are comprised of the following:

		January 31, 2022		October 31, 2021
Trade payables	$	1,283,524	$	1,327,569
Accrued liabilities		30,000		30,000
Other payables		10,123		10,137
Total accountspayable and accrued liabilities	$	1,323,647	$	1,367,706

Subsequent to the period ended January 31, 2022, the Company entered into debt settlement agreements with various creditors. The creditors have agreed to settle $116,082 of debt in exchange for 100,000 common shares of the Company. The Company has until June 30[th] , 2022 to issue the shares, otherwise the agreements terminate.

7. LOAN PAYABLE

As part of the Government of Canada’s response to the COVID-19 global pandemic, certain businesses are eligible to apply for the Canada Emergency Business Account (the “CEBA”). The CEBA provides companies with a $60,000 interest free loan to be used to cover non-deferrable operating expenses during the period where operations had been temporarily reduced due to the economic impacts of the COVID-19 virus. During the year ended October 31, 2020, the Company applied for the CEBA and received a $40,000 loan and applied for an additional $20,000 which it received during the year ended October 31, 2021. The CEBA remains interest free until December 31, 2022 and has no fixed repayment schedule. If $40,000 is repaid on or before December 31, 2022, the remaining $20,000 will be forgiven. If at December 31, 2022, any amount remains unpaid, the Company will enter into an extension agreement whereby it will accrue interest at a rate of 5% per annum, with a repayment schedule to be determined at that time.

8. SHARE CAPITAL

a) Authorized

Unlimited number of common shares without par value.

b) Issued

The Company did not issue any shares during the period ended January 31, 2022 or the year ended October 31, 2021.

c) Share purchase warrants

A continuity schedule of outstanding common share purchase warrants for the three-month period ended January 31, 2022 and the year ended October 31, 2021 is as follows:

January 31, 2022 **October **	31, 2021
Number outstanding Weighted average exercise price Number outstanding	Weighted average exercise price
Outstanding, beginning of period 18,752 $ 16.20 182,088 Expired - - (163,336)	$ 19,83 20.25
Outstanding,end ofperiod 18,752 $ 16.20 18,752	$ 16.20

GLOBAL UAV TECHNOLOGIES LTD. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended January 31, 2022 and 2021 (Unaudited - Expressed in Canadian Dollars)

8. SHARE CAPITAL (Cont’d…)

c) Share purchase warrants (Cont’d…)

As at January 31, 2022, the Company had share purchase warrants outstanding entitling the holders to acquire common shares as follows:

			Outstanding at	Remaining life
	Exercise Price	Expiry Date	January 31, 2022	(years)
$	16.20	October 4,2022	18,752	0.67

d) Share options

A continuity schedule of outstanding share options for the period ended January 31, 2022 and year ended October 31, 2021 is as follows:

January 31, 2022 **October **	31, 2021
Number outstanding Weighted average exercise price Number outstanding	Weighted average exercise price
Outstanding, beginning of the period - $ - 11,852 Expired - - (11,852)	$ 23.79 23.79
Outstandingand exercisable,end ofperiod - $ - -	$ -

9. CONTINGENT CONSIDERATION

		January 31, 2022		October 31, 2021
Opening balance	$	-	$	31,775
Extinguishment of Royalty		-		(31,775)
Closingbalance	$	-	$	-

Mr. Burns, a former director of the Company, is a shareholder of Pioneer Explorations Consultants Inc., which sold its assets to the Company and retained a 10% royalty on future earnings before income taxes, depreciation, and amortization expenses of Pioneer (Note 10).

During the year ended October 31, 2021, the Company entered into a debt settlement agreement with Mr. Burns and certain private corporations controlled by Mr. Burns, which resulted in the royalty being extinguished (Note 10).

GLOBAL UAV TECHNOLOGIES LTD. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended January 31, 2022 and 2021 (Unaudited - Expressed in Canadian Dollars)

10. RELATED PARTY TRANSACTIONS

Transactions with management and related parties during the three months ended January 31, 2022 and 2021 were as follows:

Supplier Nature of Transaction 2022	2021
Red Fern ConsultingLtd(I) Professional Services $ 15,000	$ 15,000

• I. Red Fern Consulting Ltd is a private company of which Stephen Sulis, the Company’s CFO, is an employee.

Accounts payable to related parties

Included in accounts payable and accrued liabilities at January 31, 2022 is $840,989 (October 31, 2021 - $827,118) due to officers, former officers and directors of the Company.

Other – Gain on Settlement of Debt

During the year ended October 31, 2021, the Company entered into a debt settlement agreement with Mr. Michael Burns, the former CEO and Director of the Company, and certain private corporations controlled by Mr. Burns. The Company agreed to pay Mr. Burns $30,000, in settlement of all outstanding balances owing to Mr. Burns and any private corporations controlled by Mr. Burns and for the extinguishment of the Royalty (Note 9). The Company recognized a gain of $289,105, which is included in gain on settlement of debt.

11. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The Company's financial assets and liabilities were categorized as follows:

		January 31, 2022		October 31, 2021
Financial assets
Fair value through profit or loss
Cash	$	1,242	$	9,989
Loans and receivables
Amountsreceivable		27,411		26,274
Total financial assets	$	28,653	$	36,263
Financial liabilities
Other financial liabilities
Accounts payable and accrued liabilities	$	1,323,647	$	1,307,706
Loanpayable		60,000		60,000
Total financial liabilities	$	1,383,647	$	1,367,706

GLOBAL UAV TECHNOLOGIES LTD. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended January 31, 2022 and 2021 (Unaudited - Expressed in Canadian Dollars)

11. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (Cont’d…)

The fair values of the Company’s amounts receivable and accounts payable and accrued liabilities approximate their carrying values due to the short-term nature of these instruments.

The Company’s financial instruments are exposed to certain financial risks, including credit risk, liquidity risk and market risk.

a) Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company is exposed to credit risk with respect to its cash and amounts receivable.

The Company deposits substantially all of its cash at a Canadian chartered bank. The Company's amounts receivable consists primarily of trade receivables, and Goods and Services Tax receivable from the Canadian government a. Management considers the risk of non-performance related to cash and amounts receivable to be minimal.

b) Liquidity risk

Liquidity risk is the risk that an entity will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk through the management of its capital structure.

As at January 31, 2022, the Company had cash in the amount of $1,242 (October 31, 2021 - $9,989) and accounts payable and accrued liabilities of $1,323,647 (October 31, 2021 - $1,307,706).

The Company ensures, as far as reasonably possible, that there is sufficient capital in order to meet short-term financial obligations, after taking into account the Company’s holdings of cash.

c) Market risk

Market risk consists of interest rate risk, foreign currency risk and other price risk. These are discussed below:

Interest rate risk

Interest rate risk consists of two components:

• i) To the extent that payments made or received on the Company’s monetary assets and liabilities are affected by changes in the prevailing market interest rates, the Company is exposed to interest rate cash flow risk.

• ii) To the extent that changes in prevailing market rates differ from the interest rate in the Company’s monetary assets and liabilities, the Company is exposed to interest rate price risk.

The Company is not exposed to significant interest rate risk.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The Company is exposed to foreign currency risk with respect to cash, amounts receivable, and accounts payable and accrued liabilities, as a portion of these amounts are denominated in MXN pesos and US dollars as follows:

GLOBAL UAV TECHNOLOGIES LTD. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended January 31, 2022 and 2021 (Unaudited - Expressed in Canadian Dollars)

11. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (Cont’d)

• c) Market risk (Cont’d…)

Foreign currency risk (Cont’d…)

	January 31, 2022		October 31, 2021
		US		US
Accounts payable and accrued liabilities	$	5,850	$	5,850
Rate to convert$1 CAD		1.2719		1.2384

Based on the Company’s net exposure, a 10% change in the Canadian/US exchange rate would result in $744 (October 31, 2021 - $724) gain or loss on foreign exchange

Other price risk

Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices, other than those arising from interest rate risk or foreign currency risk. The Company is not exposed to significant market risk.

d) Fair value of financial instruments

IFRS 7 Financial Instruments: Disclosure establishes a fair value hierarchy that prioritizes the input to valuation techniques used to measure fair value as follows:

Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The Company’s cash is classified at Level 1 of the fair value hierarchy. Contingent consideration is classified as Level 3 of the fair value hierarchy.

12. MANAGEMENT OF CAPITAL

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue development of the Company’s UAV business, and to maintain a flexible capital structure, which optimizes the costs of capital at an acceptable risk.

The Company’s capital consists of shareholders’ equity. The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may issue new shares or debt or acquire or dispose of assets.

To effectively manage its resources and minimize risk, the Company maintains the majority of its capital at the parent company level and funds activities in its operating subsidiaries through a cash call process.

The Company’s investment policy is to invest any excess cash in liquid short-term interest-bearing instruments callable at any time.

There have been no changes to the Company’s approach to capital management during the three months ended January 31, 2022.

GLOBAL UAV TECHNOLOGIES LTD. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended January 31, 2022 and 2021 (Unaudited - Expressed in Canadian Dollars)

13. SEGMENT REPORTING

The Company has one reportable operating segment, UAV services in Canada. The Company’s assets are located in Canada.

14. CONTINGENCY

During the year ended October 31, 2021, the Company recognized a recovery of $219,972 to reduce its outstanding provision associated with its inactive Mexican subsidiary to $nil. During the year ended October 31, 2021 it became highly unlikely that there will be any future outflows of resources related to legacy operations within this subsidiary.