All right. Welcome back, everyone. We have an update from Unusual Machines, Inc. Trades on the New York Stock Exchange under the symbol UMAC, and manufactures and sells drone components and drones across a diversified brand portfolio. Happy to welcome its CFO, Brian Hoff. Welcome back to the conference, Brian. We're looking forward to hearing your update today. Thank you very much, and appreciate everybody being here with us today. I know we have a short window for an update. Lots of good things have been happening. We'll kind of move through this relatively quickly. You can find our full investor presentation, again, on our website at unusualmachines.com under the investor relations section. We will talk about additional forward-looking statements. Again, for our full disclosure, check out this presentation online. Okay. We're going to jump into where we left last time. As a refresher, we are a drone component manufacturer here in the United States. With a lot of federal regulations that have happened over the last year to even probably even six months, the demand to onshore drone manufacturing, and the components related to that, have just increased, and the demand is almost unlimited it feels like. Here's a picture of some of our components that we have. Since the last time we talked a couple of months ago, we have entered into a definitive agreement to acquire a battery pack house, known as Upgrade Energy. This really was the missing and last component piece for what we call on our drones, the powertrain. That is really going to be just those real critical pieces to really have the drone fly. Our drones are going to be these small, attritable drones that are used primarily right now in the defense sector. This is, again, one-way strike drones. These move very quickly, and the demand for these things and the components that go into these have just increased significantly. We're talking 90,000 this year, 250,000 next year, and even more, over 300,000 just on that one program in 2028. Lots of manufacturing capacity has grown. We've grown our team. We were about 20 people a year ago. We'll probably be over 250 here by the end of the quarter, in hopes to continue to grow even further into the rest of this year, probably over 500 by the end of the year. Manufacturing lines of all these critical components are just, like I said, the demand is just such a big. It's a vacuum, is kind of what we've all been saying recently. There's just this world where the supply chains are so in these long lead times. The demand is there that we're trying to just produce as much as possible to supply the drone industry. Over the last couple of months, we've made good progress on our motor manufacturing. We've already expanded to three shifts, but we have a highly automated line. We just got some permits completed. That highly automated line, which is going to take our semi-automated line from about 30,000 motors per month, that's going to take us over 120,000 motors a month, once that's installed, and that should be done here in the next couple of months. Things are going really well on that front. We're still in this kind of defense section where we're at right now, as we have seen even larger interest as this kind of DJI void from the FCC ban on DJI drones. We're really positioning ourselves, not even just for today on the defense section, but we're really positioning to go after the enterprise and consumer once the FAA and some additional regulations are passed to really enable that section to expand. That's probably likely going to happen, hopefully within the next 12 months or so. I'm going to kind of jump around here a little bit, I'm going to take where we ended quarter one. Last time we talked, we were still in the middle of quarter one. As you can see, the growth of our revenue has kind of already seen that scaling, and it's continuing to scale even beyond this. We kind of really made investments into this Q2 of Q3 of last year of purchasing equipment, starting to hire our team out. Every quarter, we've almost doubled our employee count, but also our revenue has kind of also followed suit in relation to that. We had about 20 people last June. We doubled that to about 40 people in Q3. A quarter later, our revenue kind of doubled. Very similar, we went from 39 people to 81. Our revenue doubled again, we've now gone from 80 to 141 to now over 200. Our revenue is on the right trajectory up as we build out that manufacturing capacity. We're adding in a second shift into our headset manufacturing capacity. That's going to have a good, strong quarter as well. We're looking to add in a battery facility in Orlando. Even though we've purchased Upgrade Energy, which is out of California, we're looking to add in our additional facility in Orlando to really drive even what that capacity is going to bring. Really strong revenue. We did expect a little bit of a margin decrease in Q1. As we started hiring everybody, we've seen a shift. We have to train all of our employees. Some of our yield rates on some of our motors, we expected it, we actually expected it probably to go below 30%, but we kind of held strong in the low 30s. We may still see some margin fluctuation as we talk through the next few quarters. We anticipate that our margins are going to come back over the next couple of quarters as well, back into the mid to high 30s, and hopefully try and really obtain that 40% gross margin aspect. The other piece that's happened since we last chatted was we did additional fundraising of $150 million in March through a confidential public offering. We raised that. Those use of proceeds are really driving inventory purchases and the acquisition that we're doing with Upgrade. We're probably going to be using about $75 million of it to make future purchases for our inventory capacity. As the shift outside of China, that's also a shift outside of the raw materials that we purchase to really drive our U.S. manufacturing and not really be dependent on Chinese parts. We are sourcing parts outside of it. Those lead times take several months to up to nine months, depending on what type of material we're talking about. We've made purchases, and we anticipate making more purchases of up to $75 million right now for 6-12 months from now, because we're trying to think through our demand and the capacity of what we're looking at right there. We need to be able to have the capital to be able to withstand how that cycle is going to turn, just because the demand's getting chewed up as we continue to see conflict still in Ukraine, Iran, et cetera. There's still a need for all these components and really sourcing outside of it. We want to make sure that we have the capacity to bring this in as quickly as possible for our customers, so that way, when the demand is there for them, we can execute on their orders and their timing. It also times nicely with phase two of what we're looking at from the Drone Dominance Program, which is anticipated for about September of this year. Lots of good potential growth. The additional use of proceeds, we look at, there'll be about $26 million worth of a cash component in relation to the Upgrade Energy acquisition. We'll use a portion of the cash for proceeds there, and then just working capital and other strategic investments that we look to do and partner with within our drone and drone-adjacent other entities that we invest in. Good partners that we like to see, and we're very methodical about where we want to go put that capital to work in relation to our investment. Again, a very quick update because I know this is a short piece, but as we think about just kind of Unusual Machines and what's next for where do we see the next 6-12 months before we're ready to give and provide this next update is, it's been a strong start to 2026. Everything that we anticipated is happening, is also happening at even a larger scale. We're trying to meet the demand as quickly as possible. We're continuing to hire. We've made a critical acquisition that we needed to make sure to really supply batteries, and that hopefully will close in the next 45, 60, maybe 90 days, depending on as soon as we can get some of their financials audited. Once that's done, that'll close. Really, we're just trying to kind of keep up with as much the demand cycle as we possibly can, trying to really meet our customers' needs as they're needing to find U.S. manufacturing and really bring the supply chain home to the United States here. Really backed by, again, the strong balance sheet, strong capital that we're after. No debt, very simple cap table structure, strong working capital and cash balance to really go after that and sustain what we're after in bringing us into 2027. Sure there's probably plenty other questions as relation to it. If you have additional questions, please reach out to our investor relations team at investors@unusualmachines.com, and we'll be happy to answer anything. All right. Great job, Brian. We do have lots of questions for you. We will send them to you so you and your team can answer them on your own. Thank you for giving this update about Unusual Machines. Thank you so much. All right, everyone. We'll be right back.
Loading workspace