Welcome to West Palm Beach. My name is Stan Nowak. I am the Vice President of Marketing for Red Cat Holdings. Some of you I know, some of you I'm seeing for the first time, but again, welcome to Palm Beach. I do want to give a shout-out to Barry Hinckley and the Blue Ops team. We're here in their new facility for our maritime division. Let's give it up for Barry Hinckley and the team, who not only are hosting, but put together the really, this amazing experience you guys are going to witness today. This is also our very first Red Cat Innovation Day, so I just want to give it up for that. Thank you. You guys are going to get a really, truly an exclusive peek, not only into our growth strategy and our business, but, you know, phase two of today. You guys will see an amazing demonstration, both drone and unmanned surface vessel. I want to thank all of you, our in-person attendees. You know, thank you, investors, analysts, partners, for traveling vast distances to get here. We really appreciate you being here. Thank you to those who are tuning in online as well. We do have a live stream webcast of this. Thank you, all of you, to tuning in. Really, we truly appreciate your continued interest in Red Cat and our growth. Today, it's all about innovation, integration, execution, and where we're headed. Really, throughout the day, we are very open. We're going to have interactions between yourselves and our senior leadership throughout the day. There's going to be many moments to ask questions. First off, we're going to start with Jeff Thompson, who is going to go over our company overview. Let's get the disclosure statement out of the way for a couple seconds. All right, we're done with that. Today's agenda. Again, we're going to have the each of our senior leadership come up and do a presentation on each of their respective areas. We will then have a Q&A session, so a lot of you in person, will be able to ask questions. At the end, if you can't get to your question then, we will have many interactions throughout the day. There is going to be a shuttle bus ride, then all of us will then go to an off-site location to view the live demonstration. There will be also interactions on the bus as well. We'll provide refreshments throughout the day, make you guys as most comfortable as possible. Again, any questions you guys have throughout the day, we'll make ourselves available. If you need anything, for those in-house, restrooms, they are outside. Just some housekeeping items there. Here's the team that's going to be presenting today. Again, starting with Jeff Thompson, who's going to do just a brief company overview. We'll then move to our Chief Operating Officer, Chris Ericson, who will discuss operational scale, manufacturing expansion, and positioning, you know, our company to meet accelerating demand. Followed by our Chief Revenue Officer, Geoff Hitchcock, who will provide some insights into our pipeline and customer engagement. We'll be followed by Barry Hinckley, President of Blue Ops, who will talk about our unmanned surface vessels and maritime strategy. We will end the presentation with our Chief Financial Officer, Christian Morrison, who will talk about our financial strategy and capital allocation priorities. Once that's done, we'll go into the Q&A. You guys can ask questions. We'll have about 30 minutes for that, and then after that, we'll all get on a shuttle bus off-site and go view the demo this afternoon. We'll give you guys a briefing on the mission that we're going to be doing. We are going to be immersing all of you into a true mission today, you guys get to learn really how these missions unfold and the why behind them. Without further ado, I'd like to bring up the stage CEO, Jeff Thompson. It's always tough to go after him. He's very elegant and, you know, polished, and I'm a little rough around the edges. I'm going to try to go through this presentation. I'm going to be very brief, these guys are going to explain the key points that I do. I'm going to try to get through my presentation without pissing our lawyers off too much. 2026 is basically a massive revenue growth year for us. Just to put it in context, in 2025, we had one customer, one line item in the appropriations, and that was $78 million from the Army for the PMUAS office, which has three groups in it: LRR, MRR, and SRR. We are the SRR company. There's another one that's involved in that also. Then there's MRR, which isn't in production yet. We're in a production contract. There's LRR, the large birds, that is also not in a production contract. Out of that $78 million, Red Cat actually secured $40 million. It would've been $45 million if we had some birds on the shelf, but we didn't. That's a pretty high percentage. If you fast-forward to 2026, and we actually don't have a long continuing resolution this year, we actually have a budget, and it's $426 million, plus an additional $56 million, so almost $500 million. That same line... Considering that we're in the only company that's... On top of that, you look at MRR, which we're looking to participate in. I saw something in the print or in the J-Book that they're going to buy 107 vehicles, and I haven't been able to find any information about LRR, so but my focus is on SRR. We think we're going to have a really good year in 2026. In 2027, you know, the budget's going to go from $1 trillion to $1.5 trillion. These budgets are not going to go down. They're going to continue to go up. When we talk about, you know, revenue this year is going to be the focus of really ramping a massive revenue growth year for us, and it's not only going to be one customer, one product this year. The Air Force used to be our largest customer until probably six months ago. We've got a lot of other places. Now that the Black Widow is getting some great accolades out there, we believe that we're going to have a great year with the Black Widow, but not just one customer. That's pretty exciting. We already actually have new customers already. We just announced our first INDOPACOM contract, which is just a start there for us. It's supposed to grow pretty rapidly there. 2027, I'm not going to go in order here on these. 2027 is our focus will be path to profitability. Yeah, it'll still be massive growth each year as the budgets, not only at the U.S., is growing dramatically, but so are all the MODs. Even Japan has a budget now. We're, you know, basically building the Empire State Building this year, and then we're going to start charging rent next year for profitability. How do we get there? Well, everyone always asks us: "Are you going to be able to make them? You don't have enough production. You don't have enough space," this and that. We have spent the whole year building factories to be able to handle this revenue growth. We've been able to do 1,000 drones a month at Teal for a long time, but we haven't had the demand, and we expect to get that demand this year. We've built out a brand-new factory in Torrance for the Edge 130, so the Edge 130 can start contributing. No more one drone, one customer, one product, one customer. We expanded Salt Lake City, which Chris is going to go into some great detail on how many drones that thing can pump out now. We also have here, which is kind of more of a showroom laboratory, and we have Valdosta, which is 155,000 sq ft, to be able to build a lot of boats. We have the capacity to hit these large revenue numbers that we're going to be talking about. Just more housekeeping is, you know, we're not going to be giving out guidance today. This is not a numbers day, this is innovation day, but we report in about 19 days. We'll be giving you a lot more detail on where we expect the year to go at the end of next month. Well, March 18th, I think, is right around there is when we're reporting. You know, 2026, revenue growth. 2027, revenue growth. 2027, focus on profitability. We have the capacity now. We believe we don't have to build any new factories for at least a year, unless some new features or something else comes on. Now let's focus on new capabilities. When we, you know, new capabilities, when I think of that, I think of Blue Ops. A year ago, when we started looking at doing Blue Ops or doing a maritime division, the Black Widow and the Edge 130 could only launch from about 30% of the globe, less than a third. When we bring Blue Ops online, which didn't exist really until we just started in August, we already got boats floating in December. That's a new capability. It gives us an entire 100% of the globe to launch from. That's a new capability that's a must-have. You look at the most important thing that we kept hearing from the administration telling us: "Hey, you need counter. You have to have counter." Give a shout-out to ACS and Mike, right there, the CEO. They're our counter. You're going to see that live. They do some crazy stuff. Actually, I just saw a video, it's out there on X, so I'm not giving anything away. FPV drone going about 100 miles an hour, and they shot it down with, like, three or four shots. It was incredible. Their counter is working, and it's here now, and you'll see one of them mounted on the front when you get out to the lake. We're looking for capabilities all the time. Swarming. We've got Josh from Apium right over there. Another shout-out. You're going to see their swarming technology. By the way, almost all swarming technologies I've ever seen were kind of hoaxes, people just driving them in the background, or they didn't work, or they're trying to make them work. Their stuff works, and I'm not going to say how it works, but it's a unique way they do it, and you're going to see reliable swarming today, which really doesn't exist across a lot of places. We're going to keep looking at these new capabilities, but basically capabilities that the warfighter tells us to do, not what some engineers, and I'm not going to insult any engineers here, because I'm an engineer, but we need to use them as our capability. We need to use the warfighter as a capability. I can tell you something that kind of pisses me off about capabilities is there's a lot of products that are being sold to the United States that don't work in a battlefield. I can tell you right now, the Variant 7, we know it works in the battlefield. The Black Widow, we know it works in a battlefield. More recently, with our incredible team, I'm not going to let you know about them yet, even the Edge 130, we know works in a battlefield. Our family of and FANG, obviously, works on the battlefield. That's the most important thing for us. We don't want to just sell you stuff because it meets the requirements. I know that would make a lot of people on Wall Street happy, but that's not what we're going to do. As we continue to give new capabilities, those capabilities are always going to line up with the warfighter and stuff that actually works. Then we're acquisitive, but we're not crazy acquisitive, like, every other week. You know, we are very targeted at our acquisitions that continue to fill in our capabilities. You'll see, you know, one maybe acquisition a quarter, maybe sometimes two, then maybe sometimes none, if we think that we've got a family of systems and weapon systems that are actually going to work for the warfighter. I was going to be really brief because these guys are going to actually tell you how it works, and they're the guys that are really doing it. I want to give them a shout-out to them. Shout-out to all the teams that have made this happen. Wait, we can't forget. What about our hockey teams, huh? U.S.A.! Two gold medals from our hockey teams. I'm psyched about that. I'm going to get off the stage now and let Chris take over. All right. Thanks, everyone. Got this nice picture of me from 20 years ago, so if the face you're seeing now is a surprise, sorry about that. Focus this past year, this company has, I mean, we have grown awesomely over this past year. From a startup company, I've only been here now 11 months, I think. Yep, right about 11 months now. From when I started to where we're at now, the team has really matured and grown. This is part of what I wanted to talk about today, is just talk about what we've been doing this past year. The biggest focuses that we have is starting, going from the scrappy little startup. We've got the great minds, we've got the engineers, we've got the grit and determination, as we've seen, and you guys will see these, this demonstration today, how much has been accomplished in such a short period of time. At the same time, what do our customers want? Our customers want quantity, they want quality, and they want a stable partner, right? They want a company that's gonna be around in two years from now, to be able to support the drones that are out there, to support the systems that we have. They wanna make sure that they're still getting the software upgrades that they need, because we wanna make sure that at the pace that technology advances and moves, that we're still relevant months, years from now. Part of that, manufacturing. The number one question I got when I was in Christian's role last year was, "Well, how much can you produce? What can you really punch through that factory?" I'm actually gonna walk you through all three factories here in just a minute and talk about what the capacity of each of those factory is. Quality. As a startup company, kind of the last things you're thinking about sometimes are, the higher level operating functions, so the quality side of things, the compliance, security of your systems, financial reporting. Some of those things, because you're just focused on getting that drone done, getting it right, and getting it out there, those are some of the things that you put to the side. Now, as we mature as a company, that's what we're working on. This, line here, maturity of people, processes, and tools. We have to make sure that we've got the structure in place to support this growth, to support the maturity that we need. You know, some of the things that we've talked about in the past on the corporate side of things, you know, we've moved up with our auditors. We now have a Big Four auditor. We've got SOX compliance coming up in the future that's important to a lot of our investor base to understand what's happening in there. With now working with the military, making sure that we're compliant with all the regulations, with our imports, exports, as well as our own security systems becoming CMMC compliant. There's a lot of this infrastructure that we're building up on the corporate side. Let's go. Okay, talk about these facilities a little bit, and I'll give you a little bit more insight on what's happening. What you'll see in the picture on here, up on the left side. Let me step out of the way here. On the left side over here, this is Suite 2 and 3 in Salt Lake City, what we've been operating at last year. This right side is Suite 2. You've got the inventory racking, and you've got the production side of things here. Suite 3, we've got all of engineering on Suite 3. What we've done now is we've expanded this, we've leased up the suite, two suites next to it, so Suite 4 and half of Suite 5. What's going to happen is all of this engineering is now moving over to Suite 4. We've changed the configuration. You can see a little bit inefficiencies with the configuration here. We're actually expanding that up, so we can house another 30 to 40 engineers over in Suite 4 on top of what we already have. Now, you're looking at the production over here. With this production, thSs is 3,500 sq ft. This 3,500 sq ft, which we've been producing in, we can produce 50 drones a day. 50 drones a day, that's 1,000 drones a month in 3,500 sq ft in, with only one shift, a single shift. Right now, that shift starts up at 6:00 A.M. They get done about 2:30, 3:00 P.M., and they're out. We have now hired up, shift leads to open up a second shift when we deem that necessary. What happens with this expansion, all of the engineers are now moving over to Suite 4. Suite 5 is more the corporate side, so the corporate where, you know, we used to have two guys in IT. We've got seven, eighttwo guys. We used to have 2 people in HR. We've been expanding that. We have an internal audit team. Finance is expanding. That corporate suite is now in Suite 4 and 5. We will actually have a ribbon-cutting ceremony in the next couple of months as we open up these new facilities. That pushes over. This is empty space. Inventory racking, we're improving that to make sure that we can go more vertical with the racking to take on the throughput that we have. Manufacturing is gonna move over here. We can actually triple the size of our manufacturing floor with this move. You start thinking through those numbers, right? 1,000 drones a month with what we currently have. If you double up a second shift, 2,000 a month. You triple that space, 6,000 a month. We have been poising ourselves and making sure that we can hit the quantities that are needed when these floodgates open up, and that's what right now what we're prepared to do. We've been tightening up all of our supply chain, making sure that we can shorten up the supply chain as much as possible. You know, a lot of times we hear, "Hey, you know, what's that supply chain look like? Are you dependent on one vendor or not?" You know, everything's NDA compliant. We've moved everything out of China. Now that we've broken through the threshold of production, now everything's in expansion mode, two to three vendors for every component that we've got, making sure that as that ramps up, we can be there for it. Let's see. Okay. By the way, going back one more thing, the very bottom thing. I get asked this question a lot: "Well, what about FPV drones?" You know, one thing I wanna make sure everyone understands that a Black Widow drone or ISR or SRR drone is a very technical, very technologically advanced drone. It is a little bit harder to produce. These numbers I'm telling you right now are for that Black Widow drone. When we talk about FPVs are a lot easier to build. We can build, this is actually a very conservative note, you know, 4 FPV drones in the time that it takes for us to make 1 Black Widow drone. Now you start to think about the FPV side. These drones, we can produce a lot more than just 1,000 on that single shift in that small little square footprint area. At least 4,000 a month, we could really push those through in that area. FlightWave capacity. FlightWave has outgrown their facility. They outgrew. We moved into a new place, I think, January, February last year, and within six months, we'd already outgrown that place that we had. We moved to a new facility in Torrance, California, 51,000 sq ft. That, for the Edge 130 production, right now, it's a nice, open space. You can see in the picture here. Let's see, make sure I don't stand in front of everyone's view. The picture here, you can see a lot of space that's in there. We can produce 125 drones per month on a single shift using just a third of that facility. That other two-thirds? Expansion, just like we can do with Salt Lake City, expand to more Edge 130s or the Tricon when the Tricon is completed later this year, expansion there. Also, FlightWave is a great location in Los Angeles. As we work closer with our partners, we talk about vertical integration and some of our partnerships later, we can also do expansions here. If we need to bring some more work over from Teal, we can do Teal work down here. If we want to work more vertically with the components, we can also start doing some plastic-injected moldings. There's a lot more manufacturing on the going vertical that we can also do in California, close to many of our partners out there. Blue Ops, making sure that everyone understands and everyone knows this is not the manufacturing plant for Blue Ops, right? This is our special R&D facility. We do have this place in Valdosta, Georgia, 155,000 sq ft. When you walk into this place, when I walk into this place, it blows my mind how big it is. Every corner I turn, there's a massive new bay ready to facilitate more operations. Previous owners, previous users of this facility were kicking out about, let's see, 60 boats a month. You can think about that, 60 ski boats a month. These ski boats have also a lot of human accommodations. I'm looking at the wording here because it was just changed, to make sure I use proper boat terminology. Lack of human accommodations, right? So galleys, heads, entertainment system, berths. We don't need any of that. There's none of this stuff going into these boats. A lot of what took a lot of time to make those boats, we're gonna crunch that time down, and we can produce a lot more than 60 boats a month once we hit full production next year. This next year. We're hitting full production here very shortly as tools get delivered. Don't wanna take all the thunder, but tools get delivered this here in the middle of March. Production's ramping up, which is just a huge, amazing story, you guys. Jeff mentioned it here, but to have something starting from ideation in the middle of last year to actually having hired on folks within the group and to start to expand and already have something that's running that you're gonna see out there on the lake, is just a huge, a huge accomplishment from the team here at Blue Ops, and shows a lot of the grit and determination that they have. Love these guys. Let's see. Strategic partnerships. also make sure. There's so much more I wanna talk about, guys, the corporate infrastructure, everything that we've been doing, the value chain, the R&D processes that we've built out, delivering products. Need to cut this short. Strategic partners, you're gonna see a couple of things going on today. You know, great job with ACS, also with Apium. Apium's running the swarms today with the drones that you'll see swarming together in coordination with each other. Apium with our system that's on the front of the boat that we've talked about, that you get to see out there. Just amazing technology, amazing partners that we have. This is also something you'll hear a lot about, modular open systems architecture, thank you, that we wanna build. We are not going to be the greatest and the smartest at every single thing possible, right? There are a lot of people out there that can do things better. We wanna make sure that we grow, and we can all grow together as multiple companies, as partners. That's where we wanna make sure that we find the experts out there and integrate with those technologies and bring those into our system to make sure that we've got the best possible system and solution for those warfighters out there today. We do not want to limit the warfighter's capabilities because of just what's in Chris's head or just what's in this corporate team's head. We wanna make sure that we utilize all the resources that we have across all the partnerships. Just listing off a whole bunch here about different technologies, and capabilities that we're looking at to integrate and have integrated, and will continue to integrate over this next year. All right, enough of hearing from me. I want to turn the time over to Geoff, our Head of Sales. How am I, guys? Oh, mic'd up? Yep. Check one, two. Okay. Thanks for coming. A little bit about me. I'm the guy that you rarely see. I don't particularly like doing things like this, but they tell me that I'm good at it once I get on my roll, so I'll try to make it enlightening for you guys. Something about me: retired Air Force special operator, ran around on the ground, dropping bombs, shooting guns. Had a lot of fun doing that. Got into UAVs. I was actually a UAV instructor in 1999. Yeah, I've been doing it a little bit, right? Spent 16 and a half years at AeroVironment. They were the market leader. Jumped out of that, hopped into this about four years ago. I can tell you right now, from my 20-odd years in this space, I've never seen anything as dynamic as it is right now across all platforms, right? Boats, drones, UUVs, doesn't matter. We're moving at the speed of heat. A lot of that is coming from very, very small, scrappy companies like us. We're getting out of scrappy now and get a little more mainstream, but we're working with all those partners that Chris was talking about because they are the experts in their field. That montage video you saw, half of that stuff were companies that were on that list that he just showed you, right? The entry to get in it is if you're talking to the same people we're talking to, and they're liking your stuff, and we're liking your stuff, then we'll play with you. We'll play with anybody, right? Because one company cannot do it all, okay? That's just kinda teeing it up. Who do we sell to? Everybody. Who do we serve? Everybody. The mission sets, regardless of platform, my opinion, they're the same, whether it's a floating platform or a flying platform or underwater platform. You wanna send a thing out to do a thing and make a decision on what you want it to do after that, right? We're getting into the boat world now, the USVs. We're still in the drone world, heavy with hybrid VTOLs, FPVs, and Black Widows, right? Serving our ISR customers... Stand over here where you guys can read that, right? INDOPACOM, all the theaters we're serving in, some are gonna be faster than others. South America is always gonna be a little bit of slow. Not that they're not good people, but they don't have a whole lot of money. We're focusing on that, keeping that on simmer, but we're looking at the other heavy hitters, Middle East, INDOPACOM, okay? A little bit on that, we have all the OGAs we're playing with, three-letter agencies, those who shall remain nameless, and we're making strides to backfill into DFR, Drones as First Responders, because the ban of DJI has left everybody kinda hanging, right? We have roadmaps to provide a low-cost platform at some point, in a box, more than likely, that we'll be offering for DFR applications. Focus is still on defense, but everything we're doing in defense can be pivoted to dual use, okay? What is feeding the pipe right now? Got the Short-Range Reconnaissance program. I call that RQ. We say Black Widow up here, but there's the difference is the configuration for the Army for SRR is two air vehicles and one ground control station, right? So it is technically the RQ-28B system for the Short-Range Reconnaissance program, which includes Black Widows and a web controller, okay? So we've got that going on right now. We started with 37 companies, got cut down to 10, got cut down to five, got cut down to us. Okay, that was a three-year process, doing different generations and phases of R&D on those. Right now, as of last week, Drone Dominance. There's two programs out there, and they're kinda mashed together now. They talked about Purpose-Built Attritable Drones, PBAS, okay? Then they talked about... Let me get over on this side now so you can see. Then they're talking about this Drone Dominance program. They've mashed them together, okay? The first tranche, everybody proposed. They down selected to 25 companies. We are one of those 25. We flew last week. The other 12 companies flew last week, 12 companies are flying or finished up flying this week. We're waiting for a down select. They're gonna pick 12. 12 of those are gonna get an order for 2,500 systems. Then there's a pot of 6,000 systems for those that deliver early. The system that we have there is our 10-inch FPV, and we are already building those 2,500 in anticipation of, so we can get a bite at that 6,000 apple. That's for those who deliver early. Okay, back to Chris's point on scalability, four to one, FPV to drone or to FPVs, Black Widows to FPVs, four to one. Asia Pacific. We, let me say this, we were not particularly pleased with the press release that we had to put out. You have to understand that there are gonna be press releases that you can't really get any information out of. It's not because of us, it's because Chinese banning things in Pacific, Asia Pacific is a real thing, so they will wanna remain cagey and not give much information out other than they're an INDOPACOM ally, period. Right? Don't get upset when you don't have a whole lot of information to go off of. That's not us, that's them. That's just kind of a recurring theme in the business. Sometime we'll be able to tell you everything, sometimes we're not gonna be able to tell you much, okay. INDOPACOM is taking off, both on the boat side, partners that wanna work with us across several different nations, production capacity is a thing we discussed with some of them, but all that stuff we're working through, but this is what is feeding all the stuff that they're doing with the expansion, okay. Setting us up for the next stage. Okay, upcoming opportunities. There's a lot on this slide, so I'll start over here. Maritime operations. My opinion, USVs are kinda where drones were at 20 years ago. It's still open, wide open. There's been a couple attempts and a couple failures, and then we're coming onto the block. The difference between us and everybody else, anybody else on the planet, and if you guys can come up with a company that has this, I'll recant. Right now, our portfolio with boats and flying ISR, and flying kinetic, we are the only enterprise that offers that, and we are the only other enterprise that has that list of 20 other companies that we're playing with for their unique specialties, swarming, guns, that big missile there is from UVision. That one, that's a billion-dollar program for the Army program of record, and we're gonna be putting that on this to do some testing, right? We're picking winners, avoiding losers, and we're getting ready to meet the need, right? A lot of work going into the maritime stuff, operations, and organic, having that organic to your enterprise is key right now. A lot of companies are never even gonna think about this. We're ahead of the game on that. Sensor to shooter, same thing. You got your sensor, the boat could be a sensor, Black Widow could be a sensor, and then you have the activity you wanna take on that, which is your FPV kinetic or boat kinetic, or missiles off a boat's kinetic, right? Having all that operating in the same eco-space gives us a competitive advantage over the other folks. Adoption and attributable warfare, low cost, right? Everybody's looking for low cost. Sometimes it's not gonna be so low cost because your average guy. It's like FPV, I was just talking about it this morning. Right now, they have a very low price point. They want it for, like, $1,000 or less. Two years from now, that thing's probably going to be $8,000 because they're going to have a good idea, and that good idea is going to cost more money, right? It's just kind of the evolution of things. They're starting out at $1,000, but they're going to want IR cameras, add another $3,000, they're going to want some software, compute, and, and, and. That thing will continue to scale up and grow as they start to prove that out across the Army brigades and the Marine Corps. Modular systems, open architecture, right? The modularity of Black Widow, that's the only platform in this space... that if you break an arm, the guy in the field replaces it. If you break the gimbal assembly, the guy in the field replaces it. The only time it comes back to us is for open heart surgery, right? Nobody else is doing that. For them to be able to do that's a total redesign. Call that three years from now, right? We're, like, three years ahead on the most of stuff. Same thing on the boats. Your base platform, so much more room for activities on boats, by the way. Super stoked. What do you wanna put on it? How much of it do you wanna put on it? More gas, more stuff, more guns, more missiles, more drones? We'll configure it any way you want. Just tell us what you want, right? A lot of those discussions happened yesterday. We got some stuff we're gonna be following up on, which is pretty exciting, that we'll talk about when that comes to fruition. Allied modernization programs. Back to that INDOPACOM sale, right? China said 2027 for Taiwan. A lot of people in INDOPACOM, a lot of countries in INDOPACOM are like: "Oh, we only got a year left." Their budgets are opening up significantly, and it's a little bit of us chasing and a whole lot of people calling us, which is a really interesting position, right? Everybody on the drone side, everybody right now is making large programmatic decisions. They've been flying drones for a couple of years. Now, they're down selecting for their three-year programs, right? They're probably gonna iterate and get a new platform every three years because technology is moving so fast. What you have now is gonna be archaic three years from now, based on the tech, right? Let's talk a little bit about that. Lastly, they wanted me to talk to you about the government contracting. Some of you may understand it, some of them, you may think you understand it, and then there's those that truly do understand it, right? I'm not doing any mansplaining up here, but know that we don't control much of that, okay? Government fiscal year runs from 1 October to 30 September. Program of Record is dollars that are for acquisition of major programs. Short Range Reconnaissance program, that is a program of record. That is a acquisition pot of money. You have O&M money, which is what the brigades have. Their operating budget is O&M dollars, okay? When we talk about program of record, Black Widow, that's just one pot of money, what's coming out of Huntsville. We also have bites at now, at O&M money, where brigade commanders, DOW said an O-6 colonel, can now sign and buy whatever he wants with his money if he wants to. That's O&M dollars. We're chasing O&M money, and we're chasing program money, and we're chasing RDT&E money, which is also a different color of money. There's three avenues for money across all the services. For the boats, we're chasing RDT&E, and we're chasing programmatic dollars, okay? That's the attack. We want them to pay us for what we're already doing, and we want them to buy a lot with their program dollars. Continuing resolutions. If the budget is okay, for 20 years or more, we've never had a budget on 1 October for the Department of War, ever. There's always some level of continuing resolution, and then occasionally, there's a government shutdown. Well, we've had both. We had a government shutdown, nobody came to work, we had a continuing resolution, they finally got their budgets about a week and a half ago, they're sorting all that stuff out. When we say SRR money is coming, it's coming, but we have very little control of the when. We can target it down to about a month, which right now looks like sometime in March, we'll get the program dollars from the Army, whatever they're looking to buy for this following year. Units and program offices get their money February, March, April, depending on how long CRs run, they got to spend all of that before 30 September, that's where we go into sweeps. Sweeps are basically spare dollars. If you are a unit or an organization and you have not spent your money, then they're gonna take that money, and they're gonna give it to somebody who could spend it, and you're not gonna get the same amount the next year. We call that Sweeps. Everybody's taking care of business up to a certain point, probably by the end of May, early June, and then they start looking at their spare dollars because they know they got to get all of that on contract before 30 September. That's what we call the Sweep cycle, and that's when we're out showing all of our stuff. People are making decisions. "I've got a couple extra million dollars," blah, blah. We have no idea what those dollars look like until Sweeps, but Sweeps are a thing that we chase. You'll see stuff in our Q3, where we're booking stuff that'll be delivered in Q4 kind of thing, end of year, right? That's kind of the cycle of how things work. Last one, programs versus O&M dollars. Talked about that. The $500 million, that's what's in the line item for SUAS in Huntsville. The $1.5 billion, well, that's what's in the procurement line item for USVs. Those are the two pots that we're gonna be chasing this year, and again, they just got their money. Good things are gonna happen this year. You just gotta be a little bit patient. Never happens on our timeline, unfortunately, and everything changes with a phone call, up and down. Questions? Actually no questions till the end. Okay, Barry. Good job, guys. Thanks. Thank you. Wow! Thank you all for being here. This is our big debut for Blue Ops. As Jeff said, and Chris and Geoff Hitchcock, we didn't exist a year ago today. We did not exist as a company. We started talking about doing this in May, and then we formed the company in August, and here we have a boat. I'll tell you a little bit about this journey, but I'll remind you of a quote here or so, introduce you to a quote that I heard about three weeks ago in Washington, D.C., when we were lucky enough to meet with Congressman Trent Kelly. He said two things to me. I'll tell you the second thing in one second, which is equally as awesome. He said, "Barry, we need affordable, open architecture, and the ability to produce at scale." I said, "You have found your company," 'cause that's what we do. That's what I tell our end users all the time. We are focused on building boats. I am a boat builder. My team are boat builders and technologists, and we build affordable, reliable, and durable boats over and over again. You're looking at the end product here, which is only an idea in August, and we began production in October, and we launched the boat in December, and we began autonomizing it in January, and you will see that boat and those boats perform up on the lake today. I'll tell you the other thing he said, which is kind of interesting and parting, and it's stuck with me every single day. He said, "Barry, be kind. It doesn't cost you anything." I think about that every day. Next slide. Let's talk about some capabilities. The boat you're looking at here, the Variant 7, it's 7.8 meters long. It'll do 800 nautical miles at 40 knots. We can extend the tanks. That boat has a payload capacity of 1,800 pounds, you know, forward of the midsection. We don't really envision any payloads weighing more than 1,000, that means we can have extended fuel. I was talking to a retired admiral the other day, and I said, "Admiral, how much is enough endurance?" He said, "All of it." I said, "What do you mean by all of it?" He said, "My job is to make sure I put my men and women out of harm's way, so the farther away these things can go, the more out of harm's way we are." We can add extended range capability with hundreds of pounds of more fuel, extending this to over 1,000 miles at 40 knots. Of course, if you slow the boats down, they sip fuel. At five or six knots, it burns a gallon an hour. That boat carries 317 gallons of fuel as it is. With extended range, it adds more. You can do the math. When I talk about the boat, we talk about. You know, I use the iPhone metaphor a little bit. Our job is to build a really stable product that has the basics. I had the first iPhone that came out in 2010. At least I thought it was the first. It wasn't the first, but probably well, it was certainly my first, and it did the basics, and if I wanted some special stuff, I went to the very limited App Store, and the App Store grew over the years. That's the way we treat our boat. It is a really stable, reliable platform, and then we allow our end users, and we collaborate with them. Sometimes we find I mean, collaborators like ACS over here, or sometimes they bring them to us. We deliver a reliable platform because it doesn't matter how good your technology is if you can't get it to where it needs to be to do its job, whether that's launching a UAV, whether that's launching a precision munition. Just so you know, these are fake. They're Hollywood style, but they're, you know, an imitation of what a precision munition made by our partner would be. We are the platform, and we deliver the ability to deliver capabilities, and that's the power of the USV because as Jeff Thompson said in his introduction, the world is three-quarters water. We will get important things to where they need to be over the water with long range reliably. You'll all get a copy of this, I think, so you can follow up on these. In the Q&A, you can drill down on any of these, you know, features and functionalities. Next slide. Obviously, I talked about integration, flexible deployment. You know, the end user drives a lot of what we need, what they need, and we can easily adapt because once again, we are an open platform, right? The ability to play well with others is a great way to say it, and at the end of the day, we are boat builders. Our goal is to build boats, high-quality boats, at scale. Let's talk about experience matters. I know that's a broad statement, but I'm gonna kind of bring some context into it here a little bit. I'm a third-generation boat builder, so we're in our 98th year as a family building boats, and we are a young family of boat builders compared to our partners, Hodgson, the Hodgson shipbuilders. Tim Hodgson's back here. They have been doing it for 210 years. They are the longest continuously family-operated boat builders in the United States of America. They've got five generations, we've got three. That's the experience we bring to that boat. That's why we're able to turn that boat around, a beautiful boat that performs well, in five and a half months. The other thing about the experience matters is there was so much happening in Eastern Europe that was redefining not only the battlefield, but boat building. When a country with no navy pushed back a country with one of the largest navies in the world using what they call COTS, consumer off-the-shelf boats, I said I need to learn. I'd already been working with the Red Cat team for a while at this point in time. I went to Ukraine in July, and I began learning and watching and learning. I went back, then I went to Portugal, where a lot of USV experimentation happens from Eastern, East European nations and NATO allies. I spent five weeks there, and then I went back in late September to Ukraine, and then I went back in November, and I'm going in two weeks. What do I do when I go there? I learn. One thing about the boats that are built over there is they're built to last six months because they're mostly one-way trips. That boat's built to last at least five years and get beat on by men and women sailors over and over again until it takes its final trip. We learn, and then we bring to America, and we build to American multi-generational shipbuilding standards. That's the game we're playing, and that's why experience matters. You know, we can go into the autonomy and all that stuff in more detail. You'll see it function this afternoon. I'm going to pass it off to Christian Morrison, our CFO. Hopefully, that was a good overview of what we're doing here at Blue Ops, and when we go to Q&A, I'd be glad to answer any questions. All right. All right, well, hopefully, we didn't have to twist your arm too bad to get you down to sunny Florida. I'm glad some of you that made it from the Northeast okay. Truly, we're honored to have you here today. It really means a lot to us as a company to have you here and get up close and personal with our products and our product portfolio. We really appreciate it. It means a lot. Jeff had mentioned it earlier, our call is scheduled for March 18th, after market, and where we'll be covering 2025, and we'll give some glimpses into 2026. Please forgive me for some generalities today instead of specifics. It's by design. Okay, there's three areas in which the company is focusing its capital resources: of course, human capital, PP&E, operations, facilities, and then we are always looking for strategic partnerships. I want to spend some time talking a little bit more about the human capital side of things. We nearly doubled our headcount in 2025. For everything you would imagine that it would take to mature a company, sales, ops, engineers galore, you know, finance, HR, IT. We spent a lot of the company's money just building up and maturing the company. As far as 2026 goes, our focus will be building out the Blue Ops division. We have further heads to hire for the Blue Ops division. We have some incremental engineers that we're going to hire, and then we will start to level off as we look towards the future. Facilities, and I know Chris mentioned it, but I want to level set for everybody. This building that we're in is 11,000 sq ft, including the front office lobby. Just to visually picture what Chris had mentioned earlier, in Salt Lake City, our headquarters, it's about 4 x this size with much higher ceilings. In L.A., where FlightWave is, it's about 5 x this size. Again, but configured different. In Valdosta, Georgia, it's 155,000 sq ft, and that sounds like a big number. It's huge. If you took this building and you put it side by side, and you stretched it all the way out to the road that you came in on, there's still extra space. That's how large that facility is. It's a lot of money, we are also investing in capacity that will exceed what we're capable. We can meet any demand, we are anticipating some big demand in 2026. Strategic investments opportunities, like everybody mentioned, we're always looking for partners to complement our technology. Our focus will be technology. Our focus will be vertical integration. You know, if something makes sense that takes us horizontally, we'll take a look at it, I do want to give a shout-out to some of you in this room. You've been very helpful with some of the leads for companies that we should check out, please keep them coming. I really appreciate it. I know Jeff Thompson does as well. For 2026, revenue is going to be a great year for us. Like, just to echo what Jeff Thompson talked about in the PMUAS number, it's $426 million. That's one customer, one product. The Pentagon talked to Congress and told them they're going to spend $1.5 billion in USVs. That's not including Drone Dominance. The opportunities are out there. We just need to seize the opportunity. We absolutely have the production capability to meet any demand that comes our way. As we look forward to 2026, what our primary use of cash is going to be, is we need to build inventory. We need to make sure that we invest in our working capital and make sure that we have plenty of inventory to meet demand. That will be our primary use of cash in 2026. We need to further build out the facilities. We still have a lot more money to spend to make sure that Blue Ops can produce the way that we know it can. Same in FlightWave, let's not take for granted the complex environment that we're in. Part of doing business is we have to invest in our IT and infrastructure to make sure that we are CMMC compliant. There's a lot of cyber risk that we need to make sure that we mitigate so we don't harm ourself in the future. It's a tremendous amount of spending on the company that we just have to do. I'm excited about where we're going. From a finance guy's perspective, I do have to reiterate that what you will see today is really cool. Today is not about the numbers. Today is all about the technology. You will see eight drones swarming, controlled by one person. You will see, you know, I can't even do it justice, but the machine gun on the front will be shooting some blanks autonomously at the red team, the bad drone in the sky. It's really cool, and I hope all of you take the opportunity to talk to our presidents, get to know the tech, see it, ask questions. Please, this is a really unique opportunity, and I'm not aware of any other company doing what we're doing. We're really excited. We're excited about 2026 and where it's going. With that, I will end it, and we'll turn it back to Stan for some Q&A. Thanks. Thank you so much, everyone. Let's give it up for our senior leadership team. I'm going to ask actually all of our team members to bring your chairs up on stage. We'll go into the Q&A portion of our day. We will have two folks from our actually investor relations firm, Salisbury, here to hand out mics. I do ask if you do have a question, raise your hand, and we will get a microphone over to you, just so that we can capture it. I hit trip. Good morning. Thanks for doing this. This is a impressive setup here, for sure. Congrats on all that. Mike Latimore with Northland Capital. On the USV, you know, there's a lot of missiles and drones and all sorts of things you can put on it. Can you just talk about the pricing? You know, what's the base price? How much margin do you get on every upsell, or do you get any margin upsell? Just like, how does the pricing work on it? Kind of just, you know, sort of a fully loaded boat. All right, Mike, we're going there right away? All right. We're not here to give out margins on Blue Ops, our newest division. It is a very high margin product, I will say. The price point is out there already. It's about $700,000 for a basic config. That's not with those missiles, that's not with the Allen Controls counter, you know, or this massive explosion unit over here from UVision. That's the base without any volume. Barry, if you want to hang in, you've been building boats forever. It's a, everything he said is correct. To me, it's a, it's an efficient boat to build once you figure out how to build it. As Chris, Christian, Chris said earlier, without all the human accommodation, you can get efficient. Yeah. Then, in terms of the opportunity for your USV, you know, you've talked about INDOPACOM, I guess maybe what is the most low-hanging fruit here? Is it, you know, the Navy? Is it some, you know, country, you know, in the Asia Pacific region? What would be the sort of the lower hanging fruit for the USV business? Yeah, well, I'll just say, obviously, with, you know, there's $5 billion in one budget, there's $1.5 billion in other budgets for USVs, now, right here and now. I'll just say yesterday's customer day, we did not want you animals from Wall Street mixing with our customers. But it was a very successful day, and all of the people that you think would be a customer. Barrett's been doing a great job meeting with everyone, going to the Pentagon all the time. But, you know, INDOPACOM, I mean, that is just a massive opportunity for this team. If you want to relay any of the feedback you're getting, maybe from an admiral sitting in your boat, we won't say his name. People are incredibly excited because of the affordable way that we can address three quarters of the world's surface. The U.S. has 10s of thousands of miles of coastline. South America has 100s of thousands. INDOPACOM is island after island. Logistically, not putting humans in harm's way, but moving things around, whether they're kinetic or resupply, people are incredibly excited around the world about the capability of small USVs. Thank you. Thank you for taking my question. Austin Bohlig with Needham. Maybe a question for second Jeff. Going back to your comment about kind of walking through, like, the procurement process and, like, the $1.5 billion available for USV, there was news earlier this week about how it sounds like the Pentagon wants to, like, just go on a spending spurge of that $150 that was in the OBB. Could you maybe walk through, like, where is that $1.5 billion coming from? Is it that? Like, how does that accelerated timeline maybe benefit you guys? Thanks for the question, Austin. That is part of the $1.5 billion, right? To kind of to tag on to the last question a little bit, right? Getting into the U.S. Navy market is gonna be the biggest, heaviest lift from a technological perspective. Everybody else on the globe is gonna benefit from what we learn from the Navy, right? If we can meet the Navy specs, as we start gleaning what those specs are, that's gonna help everybody else in the globe when it starts acquisition for INDOPACOM, specifically. To your point, there's gonna be a lot of RDT&E money, right? There's platforms out there that are different and maybe underperforming. There's... yeah, we're in a really good place. From my knowledge of the USV market, we're in a really good place and a really good position with the Navy right now. We're talking to all the right people. They're going through a reorg, as we speak, to Program Executive Offices, right, or PEOs, that they're setting up. They're collapsing all of these individual acquisition entities under a larger umbrella, kind of reconfiguring. They're starting to figure it out, right? We are participating in a lot of R&D experimentation exercises. We have one coming up, a Silent Swarm, that's happening in July. We're gonna be out there doing that. We're bringing a whole bunch of tech out there, drones and boats and missiles, for that event, and we're gonna learn a lot, right? The guys we had here yesterday, we're just pulling what the requirements are. What is giving us a specific advantage is kind of our newness, right? We're a clean slate. If customers are asking for something that is different for people that are already in production, it's kind of like the modularity on Black Widow, right? Nobody else has detachable arms. If they want detachable arms, they got to do a clean sheet redesign for detachable arms. That's kind of where we're at in the boat space right now, right? I think that is a distinct advantage that we have so much more room for activities to find out what people want to put on these things, Navy specifically first, others will benefit from it, NATO and INDOPACOM. I think that's actually giving us an edge because we are open kimono, because we'll play with anybody, because we'll do anything you ask us to do, because we can do that. We can iterate and spin very quickly across the entire enterprise. Does that kind of answer your question? Perfect. Thank you. Okay. Thanks. Mike Glick from Ladenburg Thalmann. You know, as you build out your manufacturing, can you talk about supply chain and any constraints you may see there, bottlenecks? Well, I'm gonna hand that one over to him, but he's been working really hard to make sure there is no. Well, it's a combination. They were both. Yeah. CFOs here. Also, I want to congratulate Austin. He just had a brand-new baby. Oh! Yeah. Oh, good. Congratulations. Chris, you want to take that? Yep, sure. Supply chain. I can take this. Supply chain, right? Supply chain is a huge focus right now of SkyFoundry. This SkyFoundry initiative that kicked off a few months ago really trying to understand, hey, where is the supply chain at? Where are things coming from? If you take all the way down to the very basic on the mineral side of things, they're coming from all over the world, specifically a lot from Asia, right? There's this small little these small build-up that comes up. What we've been doing is we've been focusing very closely. First of all, you know, initially, it's just to pass the sniff test, make sure we're NDA compliant. Nothing can come, be coming out of enemy territory. Making sure that, you know, we're cutting off of the China supplies and, you know, the sanctions. Unfortunately, we got all that taken care of before sanctions hit us, moving in that direction. We're also looking at, same thing with SkyFoundry, what's being produced here in the United States or what's not being produced here in the United States? Where are we lacking at? Batteries is something that we look very closely at, because a lot of the batteries, right, a lot of the battery production, you go on to Amazon, you type in there, you know, the batteries that you're looking for, everything's coming from Asia. How do we find those right partners that are here in the United States? Fortunately, we've found some great partners here in the U.S. that have been able to quickly ramp up. We've gone through many different vendors to really identify the correct ones that can give us the right pricing, the right quality, the right speed of iteration. Very initially, last year, at the beginning of last year, as we were looking at these batteries, it was very hard to find a company that could take a new battery for us, iterate that, and pump that out in full production within a few months. We now found those partners that can do that for us. We then look into motors. Motors is another one. Once again, online, you look up, all the motors are coming out of Asia. We found some great partners here in the United States that have been able to produce motors for us. We now have people, a lot of people that have noticed this in other, I should say, partner countries around the world, that have noticed this lack of motor production and have also started to come to us to help supply these to us. Fortunately, now we've fixed these other areas. The, I guess, supply chain is a loaded question because you go all the way to the components that are getting built in and also supply chain timelines for us. How are we dealing with the timelines? There are some components, as we've looked at it, that took nine months of lead time to get to us. Because initially, as our engineers were thinking about just getting it done and not necessarily thinking about the cost of the components or the timeline to get those components in, we've now been able to take a step back, analyze these components, and make some slight adjustments, saying, "Hey, these chips are a rare chip, that it takes six months to get these chips into our drones. Hey, here's a more common chip that can do the exact same thing. There's better capabilities on these chips. Let's move that up. Hey, we've just cut out three months of that nine-month lead time." We've now started to pre-purchase, at a smaller percentage of the dollar amounts, pre-purchase those longer lead time items to make sure that we can insert those into the supply chain. We're operating at least six, the longest lead time items are now at six months, technically nine months, because we pre-purchased, we've brought that down to six months, we're now adjusting to say, "Hey, what's this ramp going to look like in the near future? How can we cut that down further?" Right now, we can have a significant increase in our production and the supply chain, beyond what I've talked about today, within three months, to make sure that as that ramps up, we're able to fulfill. We believe that we do have the, we're on the forefront of this, right? We have the leadership, we have the lead on this, we do not want to lose that lead. We're making sure that we are adequately structuring ourselves to keep that lead. Even if there's a massive spike, we can take on that massive spike. Thanks. Then, Jeff Thompson, you mentioned that, you know, you're the only battlefield-tested one out there. The market is, you know, growing substantially, from 2026 over to 2025, and you're the only supplier. Can you talk about what you think might be a competitive response as the market gets larger? Well, there's a lot of things that the big primes don't do. They're not gonna do the things that we will do to make sure that our product actually is just not fitting requirements, it actually works in a battlefield. We're not the only ones to do it. There's other people that are doing it in other cross products, but our team has been very forward deployed, making sure that our stuff works. This thing was designed from the beginning, and I think Ralph is already out there. You'll get to meet Ralph later on today. He's a superstar, but he's a pioneer, pre-Ukraine, which is almost everything's based on his tech. We're pretty fortunate to have that. We know what's going on in Blue Ops, the Black Widow, we know that works in a battlefield, and we're going to be giving you some details in a month or two about that. The same thing with just recently, the Edge 130. We kind of had a frankendoodle, and we know that works now too. We're very satisfied that our stuff works in battlefields, because if it doesn't, it's useless. It's basically a brick in your rucksack. We won't do that. We won't give that to the warfighter, where we know that our competitors, I'm not going to say names, but we know their stuff doesn't work there at all. Just one last question. Battery, the fuel economy seems great on that boat. I mean, you're getting close to four-plus miles a gallon on that. Can you talk about how you get that? Well, that all depends on sea, weight, sea state, payload. It varies from one to, you know, probably 12, 15. Depends. You know, it's a diesel engine, so it's math. As a matter of fact, I'll have our partners, Laborde and Steyr, they're built in Austria. We chose that engine because the Navy's been using that engine for over a decade. It's proven, they're set up to repair it, and it's a great piece of technology. Instead of answering that randomly, I'll actually have you send the whole engine, you know, years and years of real-world engine efficiency and testing. It, you know, once again, it varies on how fast you're going, what the sea state is, and how much weight you're carrying, but it's an incredibly efficient hull shape. You'll see it move today, and, it hardly makes any wake, and that's the design of, you know, five plus three generations of boat building. That got us there, and that's a big part of the efficiency, too. Thank you. Hey, good morning, guys. Ader from H.C. Wainwright. My question is around, you know, the stability of the specs from the customer side. Do you have some good visibility around that, or do you need to be in a position to sort of manage, you know, quickly evolving specs, and how do you sort of, you know, deal with that on, you know? We're kind of going in reverse a little bit on that, because if you let the program offices do the requirements, they're gonna add requirements constantly. Just because, "Oh, we want this, we want this." We were getting add-ons in July for a drone that we had to deliver two weeks later, and they didn't care. They just added a different thing that we had to do differently. You know, that is, hopefully, that's changing, where they, you know, if you listen to the administration, which we're hoping people start listening to that, they want you to get things speed and volume, speed and volume. That's basically get it 85% done, then we'll figure it out together to make it work properly on a battlefield. Well, that's not getting down to the people doing the requirements yet. They'll add as many requirements because you have to do it no matter what, if you want their business. On a different note, we're actually saying, when you actually go to these battlefields, they're like: "We don't need any of that. Rip that off, rip that off the..." All that stuff is never gonna be used. It's kind of like Mike Tyson's. Like, everyone's got a plan till you get punched in the face. We wanna make sure our stuff works, and then we'll always go and make sure we have the requirements. It's usually software that's add-ons, that does all this stuff, but we also wanna sit there and go, "Hey, by the way, if you wanna use something that works without all that garbage you put on top of it, we have that, too. Can I pipe in on that for a second? Yeah. Oh, Oh, yeah. Yeah, yeah. It's a little bit of a carrot and stick thing, right? I mean SRR, we designed it to the Army requirements. Those requirements were five years old. Five years old, right? We continued it. The carrot is we talk to the Army and say, "Hey, we got this new thing we're adding to Black Widow." The stick is, "Are you telling me you're not gonna give that to every Army brigade, and we're gonna be selling it to Germany, the latest and greatest tech, and we're not gonna have it here? Okay." We continue to iterate at the speed of heat, right? When the next four-year-old requirement comes out, we'll be light years ahead of that, right? We're gonna continue to iterate all the time. If the Army accepts it, great, but if not, we're still going with it because everybody else wants it, right? We're not gonna stop because the Army says they may or may not be interested in a specific tech, one of those 15 companies we talked about, right? We're gonna offer à la carte menus, all, some, or none. Let us know what you want, we'll bolt it on and get it out to you, and we're gonna just continue to iterate because it's iterate or die. Take a week off, you're done in this space. We're gonna try to stay, what, 18, 24 months ahead of any of that. That's right, and I'll jump in. That's a crucial reason for our office in Eastern Europe right now, right? The testing that we're doing out there. We wanna stop being reactive, having someone else tell us: "Hey, here are the specs. Here's what you need to build into it," then us build that up. We need to take that leadership position. We need to understand what those specs are before everyone else understands it and build those into it. We wanna lead that definition, because if we don't, then we're always gonna be chasing something, we're always gonna be delayed a little bit. If we can take those learnings from the front, immediately integrate those in, then we're dictating: "Hey, here's the specs you want. Stop telling us these things that, you know, the guys at, in college and university thought up in their heads. This is actually what's needed out there," and we wanna take that leadership. Oh, I think that guy next. Hey, Josh Sullivan, Jones Trading. What do you think about the longer term product portfolio map? You know, we look at, you know, the size of this boat. What are you thinking longer term? It's an innovation day, so if you're gonna dream a dream... you know, we're talking about, you know, that whole conversation is just about 24 months technology, but, you know, five- decade or five generations of boat building capacity. You know, we think blue water or something along those lines. Just curious what you guys are thinking longer term. I'm gonna give a quote before he starts, 'cause he's changed my entire mind, just a few months ago. People that can build, and if I'm saying it wrong, can build 60 and below is completely different, you know, technology than 60 and above. The expertise is completely different, and some people can do one, and they can do it. Not almost anybody can do both. Ever since then, I'm like, we've got to stay below 60. You know, there's a reason Caterpillar doesn't make cars. They're different animals. In the sub 60-foot boat market, even sub 40 is different. 60, there's some connection there, below 60 feet above 60 feet, certainly above 100, they're completely different animals. My father always told me, "Pick one thing and do it really, really well." Our goal is to be the dominant small USV builder in the world. Full stop. Product pipeline, we already have two more boats in design that we'll be rolling out, you know, as soon as that's design complete, and we can move into production. That's just the beginning. You know, I would imagine we'll have a pretty complete-two ... portfolio of hull shapes to match the sea state and mission requirements of, you know, NATO navies around the world. Then maybe if I think about ARACHNID, you know, broadly speaking, what are those core technologies on the technology roadmap that you guys want to dominate today, you know, as we get through these bigger orders that are coming in the next two years? Longer term, what do you see as those core technologies that you're really focusing on right now? Well, you're, you've seen a lot about it today, and this is not a factory, but the factory is the weapon. Mass in the old days, you know, in the art of war, used to be considered people, and now mass is robots. We gotta be able to produce millions of robots to go against millions of robots, 'cause our adversaries are gonna be doing the same thing. As we, you know, to be able to have more control over that, we wanna do it. You'll see us looking at a lot more vertical integration so that we control almost the entire, almost we, the goal is, you know, is get as close as blindly the entire supply chain and doing a lot more of the stuff ourselves through vertical integration. Not just in the Black Widow or the Tricon or Blue Ops. We wanna make sure that we can control all those things so that if something new is, or I mean, the speed of war is crazy right now. Three weeks is a long time. I mean, it used to be 30 years before they could, you know, would change how they do stuff. There's still stuff that's 30-year-old technology in the U.S. We wanna be able to be super quick, iterate quickly, or even if there's a whole new category, which bomb boats didn't exist until a couple of years ago. It wasn't even a thing. Now, you know, with 30 of these coming after a multi-billion dollar ship, they don't know what to do. We just wanna remain flexible, have the capability, and just learn how to take something from scratch, build it, sell a lot of them, make it profitable. New thing comes up that's in the robotic world, I mean, that's a floating robot. We have flying robots. That's a gun robot, Allen Controls. You know, we've got, I think the crucial thing is, once you have all these robots, is how do you control them with just a few people? 'Cause it's useless. Like, FPV is a great market, right? Every FPV drone needs a person. That does not scale well right now. Another thing that people don't understand about FPV and robots, is that FPV is useless without a Black Widow. You need... All these FPVs everyone's really excited about right now, $340,000 in Drone Dominance, they're useless because they have old analog cameras. Because they're quick enough, they can only see a few hundred feet, you know. I've been to a training facility in Ukraine, and you got ISR drones, which, you know, we would love to replace, and then we got FPV drones. The ISR drones, like a Black Widow, tell them where to go. All of these things, we gotta get rid of, we gotta get rid of more humans. FPV, if it's one to one, the most expensive part, those drones cost, you know, $20, $300. No, they don't, 'cause you got a human on every single one. The human for any aircraft ever, even, you know, small airplane, I mean, the human is the most expensive part per hour. We gotta look forward there to get more humans out of the loop. You're gonna see a fundamental shift, right, with the maturity of swarming, and you're gonna see that today, right? You're gonna see one person flying eight drones today, and you're gonna have three guys driving three boats. Two, three weeks from now, you're gonna have one guy driving those three boats and flying those eight drones. Then you start having the conversation about sea and air-launched effects. There's different missions out there, which is different than the Ukraine mission. Load it with C4, send 30, hit a ship. We're gonna wanna jam, we're gonna wanna sniff, we're gonna wanna look at stuff, we're gonna want other effects, both air and sea, right? Going back to the MOSA conversation, right? Swarming is the catalyst from where everything else is going to come from. If you have a specific classified payload you want to put on it to do a thing, okay, we can have 10 boats doing that. We can have 40 boats doing this, we can have five boats doing that. We can have 20 doing this. You can have 100 FPVs doing this, and all one dude's doing it. Then you gotta reduce the cognitive workload, right? I started this stuff, it was two operators for one bird at AeroVironment. One guy on a TOUGHBOOK computer 20 years ago, one guy on a TOUGHBOOK computer, another guy on the sticks. Now, we've got one guy flying eight making them do a dance for you today, right? They can do way more than that, it gets really expensive to do that test for us to fly a 100. We could fly 100, but I don't know that I wanna pull out of that all, out of inventory to do that, right? We're giving you a sniff, and it becomes overwhelming. If you saw 100 drones take off, flying around, and one guy doing it all, you'd lose your mind. It's hard to get your head wrapped around seeing something that large. Yeah. Right? You're just like, you kind of go starry-eyed, and you can't really think about how to employ all of them. It's gradual steps. The demonstrations will get bigger. The capability is gonna continue to escalate, and we're gonna start bolting other stuff on. "Hey, can you do this, and this?" "Yes, we can do that. Give us your payloads, give us your cameras, give us whatever it is you want, and we'll bolt it into one of these things, and we'll link it all together in a common operating picture." I think that's the string you were kind of trying to pull, right? Yeah. Yeah. Appreciate that. Yeah. Everything comes off swarming. You get that perfected, then you can add everything else to it. Is that ready already? Is it already ready, or are you still working on building that software or platform? Swarming? Yeah. You're gonna see it today. Yeah. It's ready. There's a question right there. How you doing? Josh Bennett with Weatherbie Capital. USV's really impressive, what you've done in a year. Five and a half months. Who's counting? Well, we- You're leading me... Part of the year, yeah. So you did it in five and a half months. My question is, like, again, Hinckley, I know the name, obviously, so history of boat building, so that helps a ton. What keeps competition from doing the same Anduril or anyone else who wants to just say, "You know what? We've got a lot of money. We've got the, the other family you mentioned, that's also the boat-building family. We wanna replicate what you did." What is it that keeps them from doing the same thing in four months now and having a competing boat? Maybe that's okay. Maybe it's someone you partner with, but just curious to know, you've done an incredible thing in a short amount of time as a team. How do you now keep the competition from doing the same thing? Thank you. Humility. Um- I work there. Wait, hold on. I can't wait to hear this. Right. So- Yeah. ... you're asking me to predict the future, which, of course, is unpredictable. That's our job. We get to do that every day. Yeah. Got it. Yeah. Well, I'm on boatbuilder. You know, I can tell you that they're gonna be hard-pressed to find the experience that we've assembled, but they certainly could, and I guess that's a possibility. You have to say it's a possibility. But as long as we keep humble and keep reminding ourselves every day that we are boat builders. I'll tell you, one of our. I spoke to a former employee of a large competitor, and I think he said he was the eighteenth employee of a very early adopter competitor. He said when they pulled them all into a room, and they said, "We're gonna build boats. They're just not gonna be boats." We never think we're not building boats, and we know how to build boats, and we do that over and over again. Of course, a competitor could shift the mindset, but most of our competitors have said: "Okay, we have a great piece of technology. Oh, by the way, we need to build a boat to put it on." We started with the concept of, We need the best, most reliable, durable boat, and then we're gonna put the technology on. It's just a completely inverted mindset that I've witnessed. Who are the others that you see that are trying to do it, and who are you watching that could be partners? Who are you watching that could be competitors? Just we don't know the space well. I'd recommend Google. I mean, I know we're friendly with the usual suspects. You can do a quick Google search or go to some of the USV pages, you'll see them all. They're friendly. You know, I was at REPMUS for five weeks, which is the big showdown. It stands for Robotic Experimentation Prototyping for Maritime. Yeah ... experiment, Unmanned Systems. Yeah. It's in Troia, Portugal, every year. Big Portuguese sponsored NATO event, and all the usual suspects are there, and we're all, you know, you know, get to know each other, and I have respect for all of them, and I wish them all the best. Great, again, really impressive, what you've done. Now to the CFO, so that you're not left alone, and I won't ask... Thanks. ... specifics, but I heard SOX compliance in the working and then also obviously compliance with the various military specs. Can you just give us any sense of timing in terms of when you think you'll be SOX compliant, and when do you think you'll meet the what is it CMM2 or whatever the right certifications are? Yeah, I'll start on the SOX side. We have to be compliant January 1st, 2027. We have a team. We're already going through the whole process right now. We'll be holding our audit committee meeting on March 12th, where we're gonna lay out to the audit committee our entire plan. On how we're gonna be SOX compliant and integrate that and make sure that we can meet all of the requirements starting January 1st, 2027. Didn't think I'd get that question. Right on! Yeah. Yeah, good. I'll kick it to Chris on CMMC. Yeah, CMMC compliance, full compliance, you know, there's a range of compliance that's happened, right? We've already done our pre-assessments. We've already started building out our tech stacks. Actually, all the tech stacks are now built out, rolling in. We are doing our first initial audits or kind of our fake audit, draft audit in April. We'll be fully compliant by the middle of the summer. I think our goal target is September, we're well on track to hit it, middle to the beginning of the summertime. Hey, Ned Morgan with BTIG. I was just wondering if you guys could talk some more about your strategy of strategic partnerships as opposed to M&A? You want to take that? Well, yeah, I'll be very frank. We look at a lot of our strategic partnerships as an M&A roadmap. You'll see us partner with companies for years on end, and then lots of times we'll, as we gel, we like to fold them in. A perfect example is I tried to buy Fat Shark for five years in a row, and we finally got them in there, and that was before everyone knew anything about FPV, before the FPV was the most successful weapon in the Ukraine. It's, yeah, you know, getting to know lots of times startups. It's their baby. They don't wanna become corporate. I don't think we're very corporate, at least I know I'm not. They, they don't wanna have that culture change and that place. If you partner with someone for two or three years, like all the guys that were in these rooms making these boats work in the last few weeks, you know, killing themselves together, other companies, not just ours, our employees. When you work side by side like that, you really get a feel of the type of people you wanna work with. I mean, it's always people you're gonna have to work with, but, you know, I think our roadmap for M&A comes from our strategic partnerships. A lot of the strategic partnerships are really actually kind of not forced on us, but the Army will say: "Hey, this piece of technology works really good. We're looking at these guys. You should get them on the Black Widow." We call them and say, "Hey, let's talk about that." That's kind of an organic way to have a, you know, the Army and the Navy be our own sales force for what we should have on these for features. Then when you look at, you know, I look at what's going on in, you know, these other battlefields, and we have to pull from that. When we were at AUSA, every person we talked to from the Army was like: "If your stuff doesn't work in Ukraine, we don't want it." I'm like: "Well, I know you buy a lot of stuff that doesn't work." We are, you know, that's, that's the way we're trying to look at the strategies. We're not gonna see everything, we have the platforms now to do that. Just one more. How do you guys think, you know, moving forward, long-term strategy of Red Cat, how are you prioritizing a program like SRR versus, you know, more attritables, cheaper drones in the Drone Dominance program? Well, Drone Dominance is just, we look, you know, right now, they're gonna be great margin. You know, we just went last week, and I think we did pretty well. You never know. You know, at first, those are gonna be great margin at the beginning, and then the price comes down, the price comes down. Let's say it becomes a loss leader. It's ammunition. You have to have it. You can't not offer FPV. More importantly, FPV is useless without the Black Widow. We're actually one of the only companies that showed up and said, "Hey, you want us to do sensor-to-shooter?" No one else has a Black Widow that's, you know, the Army's already accepted in the Program of Record. That's a key thing. You know, FPV's been around. I've been in FPV since 2015, so I know the industry very well, but it's a very difficult business model because of the volumes. once it gets down to low margins, because of the prices people are gonna want, it becomes a tougher business model. We'll always, probably always have it. things will evolve with FPV, but it's also gonna be relying on, you know, we can put FPVs on that. We can put FPVs on all the other new hulls that we're coming up with. We actually are working on a very complex launching system off of these units that you'll be hearing about soon for Black Widows and other drones coming out of these things. The FPV business model is difficult, but it's basically a bullet. You don't have. If you don't have bullets, you can't kill anybody. Thank you very much. Thank you. It's Craig Irwin from Roth. Wanted to ask about capacity, right, both for FPV and Black Widow. You showed us a schematic on your facility, tripling the floor space of production. You also mentioned that you're only working in, you know, one shift there. You know, is there a reason you're only one shift? Can you go to 20-hour, 24-hour production after you triple the floor space? I mean, is this really a 1x-10x facility if we see that kind of surge out of the buying entities right now? It seems like you could be facing down a situation where that capacity could be needed. If you could also talk a little bit about the labor requirements, how technical are the labor requirements that you need to put in place this greater manufacturing capacity? Is there an extended learning period for these employees to come online efficiently? What are you doing to prepare? Chris, that's you. Yep. Sorry, can you repeat the first half of that question one more time? Your Utah facility, right? Yep. How fungible is the production between different, the different, drones? Okay. Okay. You're tripling your floor space, right? You've got one series of bays, one pod that runs one shift. That's right. You have plans you shared to triple that. Is there a reason you only run eight hours, and then, is that really a 10x facility if you run 24 hours? Okay, I'll kind of reverse answer the questions a little bit. 10x the facility, not necessarily because after you start hitting, like, if you start hitting a third shift, you're going to start losing a lot of efficiencies in there, right? The inventory coming in, inventory flowing through, you're going to start losing quite a bit. If you ask me right now, from one shift to two shift, there's no inefficiencies. We would definitely double the capacity right there. Doubling up the floor space, we're still going to be pretty good on that area. I also want to correct it. Right now, the plan is not to expand the facility immediately. We do not need that expansion and to triple the size. We already have leased the space. We're already moving the manufacturing from the yellow area into the new empty space, we're going to expand a few areas also for FPV. That's the current plan, but we have the capacity or capabilities to expand further. If you ask me what it takes, and this gets into the second question as well, the manufacturing process, unfortunately, we've got some great manufacturing engineers at our facility. There's not so much a technical capability, but it's a mindset capability that we're looking for our guys on the manufacturing floor. Guys who are open to communicate, "Hey, I think it would be faster to do something this way. Hey, I'm having trouble putting these together." The manufacturing engineers that we have are designing new tools and tool sets to be able to replicate quality checks faster, to replicate the production, to make it easier so you don't have to determine, you know, how much do you have to torque each of the screws. These guys have made the manufacturing process very simple. Our partnership with Palantir, our MES systems that we're using, have really been able to enable us to not necessarily need a very, very technical person on the manufacturing floor. In fact, as we release these requisitions for hiring, we're getting hundreds and hundreds of applications, where we're able to really define the mindset and the type of people and the energy that they have to bring into the factory floor. We've got great workers on our factory floor that are enabling us to do this. If we then said, take what I just said, and, "Hey, we need to hire second shift or third shift," we've got those folks that we're able to easily bring on, to quickly onboard them through the manufacturing process to scale up quickly. One thing I want to add to that before we go on, because everyone keeps asking the same question on the production and this and that. At 1,000 drones a month, what we have right now, is $30 million a month with one shift. Okay? We did $40 million last year, right? If you double that shift, you're doing $60 million a month with just one product. People lose that, you know, everyone just talks about they wanna hear about tens of thousands a month. You know, we can. Like you said, if we do two shifts on three different lines, I mean, we're doing hundreds of millions a month. In the context of one of our global trying to find the politically correct word, but another global player making 10,000 drones a month, right? There clearly is interest in having that kind of capacity. Is that something- Yep. ...you aspire to serve? Well, I mean, let's be like China, our enemy. I'll say it. Russia, our enemy. You know, we're banned from China, so, they are, they're making $3 million-$4 million a year. Russia's making $3 million-$4 million a year. Ukraine's making $3 million-$4 million a year. We have to get there. And if, you know, I really don't care about people's political views, but this administration's actually kicked it into gear to do so. We still gotta go faster, I think. And that's not just being selfish as a business owner that makes them, but if our adversaries are making $4 million a year, we've gotta kick it into gear. And we're ready to do that. We have. I mean, we just need... You know, there's so many start-ups that are getting into this industry now, but they do go through the valley of death. We have to overcome that valley of death with orders, and we can't just say, "Hey, they're making $4 million. We want to make $4 million, too." Someone's gotta pay for 'em, and that's we're getting there with that type of a mindset from this administration and Pete Hegseth, the Department of Defense. Last question, if I may. That's actually a fantastic segue. M&A, right? Most of the private companies out there will be capacity-starved, capital-starved, and have a limited expertise set. It seems that, you know, even though, you know, valuations are improving for successful companies like yours, a lot of the private companies out there, you know, could have a very strong desire to be acquired, right? Yep. it can really release their potential into the market. You know, how broad is this ecosystem that you're seriously considering right now? You know, there is a little bit of a land grab going on, and tremendous visibility on spending out of the buying customers. You know, how active do you? You said, you know, one a quarter, maybe two a quarter. Is there potential for that to accelerate, and will these be bigger acquisitions, smaller acquisitions? If you could just- All of the above. ... give us more color? One of the things that, you know, someone asked me the other day, I forget what interview it was, but they were talking about innovation. Is it all coming from China? Is it all coming there? I was like, "No, it's all coming from Ukraine." The innovation is pouring out of there. And as when they're enabled or if someone's enabled to export their technology, there's gonna be massive opportunities there for some great technology. It still has to be made in U.S.A.. There's a lot of great companies in other countries, still have to come here, be made in U.S.A.. Otherwise, people aren't gonna, the U.S. is not gonna buy it. There'll be a few strays that would take too long, but, and they'll do it, but they typically want it made in U.S.A.. You've gotta at least have an arm or a partner that's a majority owner. There's a lot of innovation coming out of Ukraine. To the early part of your question, there's a lot of great companies that, I mean, they just run out of money. Teal was out of money. It was about to go out of business. Fortunately, they had gotten through the first phases of the SRR down select. We came in, and we actually built a factory, showed some expertise, got rid of the people that didn't know how to do it, and built a great factory. Now we're one of the best drone makers in the U.S.. We think we're as good as the Chinese drone manufacturers, which had a 16-year lead, and there'll be more on that in just a couple of months. Then FlightWave, which Shawn Webb, who's back there, he's sitting down, we stole him from AV. He used to make the Switchblade. He came in, and FlightWave, they ran out of money, and they had some great tech. They had the longest flying fixed wing, or any drone on the Blue UAS Cleared List. So you get these guys with these head starts, and then they run out of money because it's a little easier right now, and there's always waves. When you're public, you have access to the capital. We'll be opportunistic with those situations, but I think there's gonna be a lot of innovation coming out of Ukraine once they have an export path. We have time for one last question. Hi, Alex Latimore with Northland Capital. I just have one question here. Can you frame the new Department of War marketplace opportunity? Is this a new revenue stream? You want me to. Can you or- Does this ease procurement cycles? It's gonna be great. Anything to do with sweeps, maybe there? Yeah, absolutely right. The marketplace, remember I talked about procurement dollars versus O&M dollars? That's where O&M dollars go. A brigade commander can go there. It's like GSA catalog. Everything that is Blue UAS Cleared List, they can, the Army PMUAS office, the program office, controls who gets in. We've already sent our stuff in. We're kind of the first. We're gonna be the beta testers of that. Basically, that's where brigade commanders or company commanders or anybody who's got a government credit card and wants to buy a thing, can go buy a drone off that site. Infancy stages right now, we're in the middle of the beta testing of that. I think they're gonna have the ability to start using it in the next month or two, but it's gonna continue to get refined through the rest of the summer. That's basically where any DOW unit with money can go there to buy a thing. If you think about the SRR program, right, there's, what, 55 brigades active in Guard, and then you have a program of record, SRR. They're not fielding golf. Somebody's at the bottom of that list that needs drones now and are willing to spend their O&M dollars for it. That's where they go to the marketplace to buy those. What does it look like to market on that marketplace? Is it kind of a word-of-mouth game? Like, how do you get? No, it's like a GSA catalog, right? You got pictures of your stuff, you got descriptions of your stuff, and you have price of your stuff, and then you have quantity discounts of your stuff. Yeah. It's just like a GSA catalog, but it's specific to drones and to DOW. ... and Alex. Yeah, think of it as like a poor man's Amazon. I mean, we were flattered when they wanted us to participate. "Hey, you're the first customer that can see and look, what do you think?" They're asking for our feedback. Yeah. You know, and we're on the side chatting like, "This is like garbage Amazon." You know, like, yeah, it's pretty interesting. I think. I think it's a new way of thinking about it. I think they're great, and you should buy drones on it. Yeah. I think we'll have a huge head start over our competition. I do think it'll be incremental. Yeah. Knowing the government, it's gonna take a while before it's up and running. We love the government also. Yes, they're great. The best. All right. Thank you, everybody. Yeah, thanks. All right, that concludes our Q&A portion. Let's give it up for our leadership team. I would ask the leadership actually to step up stage and you can take your chairs. We do actually just have some closing remarks from Jeff Thompson, our CEO. Nice. Nice. I have closing remarks? You didn't tell me about that. Awesome. Awesome. Okay. Followed by autograph signing. Good job. No, grab a chair. Glad that's over. Standing here. Thanks. Thanks, you too. You know, what you're seeing is basically Red Cat Holdings has a holding company, right? Our whole idea is to give entrepreneurs like Barrett Hinckley and Sandy Spaulding, great entrepreneurs, we will say, "Hey, I need some help. Can you find some friends to build a boat?" They said, "We'd love to build these boats for you." That was, I think, in July at lunch, right down the street. FlightWave, same thing. Teal, same thing. We give them the resources. We don't want to break up their culture. We don't want to make people move. It's a very interesting model compared to other folks. We have a holding company. If we find a company in XYZ city, we're not gonna uproot all their families. We keep the culture, we keep the speed, and we take all the minutiae off the top that all startups, including myself, hate doing. HR, 401 plans, payroll, all the taxes, auditors, all that stuff is a pain in the neck. What we see is we keep the cultures of those local startups as they mature and have access to capital. I mean, I can't even believe this building was empty. The same thing at Teal. Every time I go to Teal, I'm like, right now, they're kind of racked and stacked. They're gonna be using bunk beds pretty soon. The growth has been fantastic. The biz dev team's all over the globe all the time. We're getting great feedback from all of our stuff. This is gonna be an epic year for us because of the growth. I mean, $40 million from like, I don't know what it was the year before, I don't want to think about those days, to where we're going this year, is gonna be so compelling. Obviously, 2027 is gonna be massive also. We start to work our way into profitability. It's just a normal path, but we're glad that you came here for the ride. We know why you're here, if we perform all the stuff that you do, you'll do well. Thanks for coming. That's it. Thank you so much, Jeff Thompson. We are about to make our way to the shuttles. We're gonna close just with a little glimpse of what you guys been working on.