Yeah, let's start. All right, well, thank you guys for our third fireside chat on our drone track this morning. We have the CEO of Unusual Machines, which is a domestic leader in flight-critical drone components, very well positioned in this unmanned supercycle as a key component and subsystem provider. So Allan, just to start, for those that are newer to the story, can you just give a brief overview of Unusual Machines, ticker UMAC, so UMAC, and what problem you're solving in the drone ecosystem? Yeah, thanks, Austin. Thanks, everybody, for being here and for people tuning in. Unusual Machines, we manufacture drone parts in America. The problem that we're trying to solve, and we're trying to do it very quickly because we've been public less than two years, is that for 30 or 40 years, consumer electronics supply chains manifested in Japan, and then Taiwan, and then China, and when you look, a company, DJI, really dominated the drone market, beat out 3D Robotics and GoPro 10 to 12 years ago, and this whole supply chain is in the Shenzhen for all of these drones, and now, with the conflict in Ukraine and some of the other elements and the recent FCC ban, there's this need to establish a manufacturing base in the U.S. to build these things that we really haven't built in 30 or 40 years for these small drones. And so really, we're really focused on that category and doing what I would say are the mid-tech things. You know, Eric was here earlier, and he talked about technology being there. But if you look, you need the motors, the batteries, the frames, the props, and you need all these to be really reliable, and you need them in large scales and at a very reasonable price. And so we're ramping as fast as we can to build that part of the supply chain in Orlando. Awesome, and I think, too, because the new slides up, or decks up, you guys have a slide in here which you should go to, which kind of walks through kind of the key components that are in these small drones. I think it would be maybe helpful high level, or does that work? No, no, I'm touching buttons. Okay. If you don't mind stepping through, there's a slide with five parts on it, and we can talk about what they are. Yes. Yeah, so there's a lot of different parts to a drone, and drones come in all different sizes, right? They can be as the size of a laptop up to the size of this room as an airplane. When you look, people don't sort of differentiate. A lot of times when we think of drones, we think of the ones at weddings, the aerial photography drones, and that's really the size category that we make parts for. Then, more importantly, if you've seen the conflict in Ukraine or in Israel, these are attritable drones, the one-way drones, the strike drones. They have real price sensitivity, and they have real volume demand, and that's what we're seeing as a driver. We try to make at least one part for every single aspect of what it requires. Let's see if this is working yet. There we go. So if you look here, here's an example of parts we actually manufacture. They're all NDAA compliant. You have a camera on the front of it, you have motors, you have a motor controller, you have a flight controller, there's a communication link. And then we'll do the frames, whatever size you need, and we'll put in the batteries, and we'll help you figure out what it is. And when you put all these things together, it'll go up and fly. So what a lot of our customers will do is they'll start with a bunch of our parts, and then they'll put in their own brain, or they'll put in their own camera, and then they're able to source the rest from us to get to the scales that they need. So that's really where we sit. And what we're really doing is taking market share away from the Chinese companies that serve this market, where if you look at the bigger drones, the things that Anduril or AeroVironment are doing, there's an aerospace supply chain for that domestically, and it's pretty good. And so that's why we try to focus on this consumer electronics market and this displacement of it as our primary area of what we're doing. Okay, okay. And so, like, here at Needham, we believe 2026 is going to be the year of the drone and a true inflection in these low-cost attritable systems. So, like, what's changing structurally, like, in defense programs and in supply chain that's, like, making this moment different than, like, what we've ever seen before? So I think we have seen it before, just somewhere else. This is the second greatest legislatively created market I believe I've seen in my lifetime. The largest one was the Great Firewall in China, where they kicked out Facebook, Google, Microsoft. Small companies, Tencent, Alibaba, and Baidu came to fill the vacuum. There's no making the market. DJI was doing a million Mavics a year in the U.S. at $2,000 apiece. It's a $2 billion domestic market. The Ukraine conflict exists. T-Motor was selling a lot of these parts. It's a Chinese company that's now on the banned list. There is a several billion dollar a year market vacuum that was just created by the FCC banning all foreign drones and drone components. It's wide open in that regard. And then on the other side, this administration is pushing the defense budget to drive money into the ecosystem. If you look, there was the PBAS program, where we are a supplier to at least one part for every one of the winners. There is the Gauntlet program, which was announced just last month, where they are trying to do these 350,000 low-cost drones over the next two years, with 30,000 of those drones expected to start to be delivered in March. They are going to provide the submissions just closed for all the companies that are going to submit, and they are going to tell the winners that they won in the middle of February, and they expect drones to start to show up by March. There is this huge market vacuum, no market that needs to be made, and a very large push by the Department of Defense to solve what has been 30 years of offshoring in a year or two. That is the driver. This is making the market for any technology thing is always the challenge, always the question that you typically have, and in this case, that's made. We don't have to go define the product. The Chinese companies have defined the product, so there's this really strong short circuit on engineering, on product design, on product market fit that allows this to go extremely fast, and then there's the benefit of capitalism, so that's actually America's superpower. Instead of having to be organized about how we do it, and I think the administration understands this, is they can signal, they can drive these orders, they can create these demands, and they know that in the marketplace that it's going to cascade because investors can support these smaller companies that have the opportunity to scale very fast and see returns. You know, some of the companies aren't going to work out. Some are going to consolidate. But the ones that do are very quickly going to fill that market vacuum and be several billion-dollar companies doing billions of dollars of revenue a year to replace what has just been legislatively removed. One thing that I think's really great about the investment case for UMAC is it's a simple analysis. There's really three variables, like how much content that goes into these small drones, how many drones we plan to build over the next one to two years, and what's your percentage market share that may look like. Could you maybe walk through what those three variables are, like how much you guys make from each drone, how many drones you think we could be selling over the next couple of years, and potential market share? Yeah, absolutely. So this is what a typical drone looks like without a battery or payload. They come in different sizes. If you look at the attributable systems where the primary driver is, you'd see, and this is all the parts we do in a breakdown of a drone, a seven-inch drone. On this drone, which is actually one built by the 101st Airborne, so this is commercial, this was public, we do about $550 worth of material on this specific drone. If you think about a larger drone, that number goes up, motors get more expensive, a lot of the stuff gets more, could be up to $1,000 a drone. So you could assume that if we've won the market share for the customer, the wallet share, we're $500 to $1,000 a drone. If you look at the PBAS program, for instance, we have at least one part on every customer. If you look at the Gauntlet program, which will close in February, we're quoted into a lot of the submissions, and our personal target is to be on at least eight of the 12 winners. We are really interested right now in having the relationships with everybody that's building drones because we believe that as time goes on, we're, they're going to move to us as a second source or as a primary source for more and more components. And in doing that, we figure over time we're going to capture probably about $500 a drone in value in the current cycle. Just the Gauntlet program is 90,000 drones just next year. So that's a $45 million market opportunity. PBAS, which we're on, is another opportunity, and you've seen that we have about $20 million in outstanding orders already that we expect to fulfill in, or our customers want us to fulfill at least in quarter one and quarter two because everybody wants us to go really fast, and so when you look, the opportunity, even in the near term, is $75 million-$100 million next year for the demand signals that have been put out either previously or will be put out just through March, not counting anything that comes out of the NDAA or any other budgetary action when the government places orders next summer. Okay. Just to clarify, too, 90,000 of this billion-dollar Drone Dominance is for 2026. Yeah. And then there's another 250,000 units for 2027, so 340,000. So, Allan, at the end of the day, though, you guys are a manufacturing company. Yes. And so, like, could you talk through, like, you do use a combination of external manufacturing partners, but are now building this motor facility in Orlando. Could you talk about the difference between the two and, like, how that ramp of the facility is going in Orlando? Yeah, absolutely. So motors is one of the, I'd say, more critical elements of the supply chain. It has been not really done in the U.S. in this category. So if you look in the U.S., there's only really, electronics are pretty well defined for contract manufacturing. So anytime we're going to go and put in place manufacturing equipment, we really want to see a path to 85% or better CapEx utilization. A bunch of board shops, we can work with people to do boards in the U.S., that's great. Pretty much everything else we have to build capacity for. So, more than a year ago, we set out to order the CapEx and start to put together the motor factory. It turned on in November. Our best single-day, single-shift run was about 300 motors so far as that improves. We figure by the end of February, we'll be at 10,000 motors a month a shift. Given the FCC action and the Drone Dominance program, we've actually already hired a second shift. We'll hire a third shift. So we see about 30,000 motors a month as capacity there. We're putting in a highly automated line that, again, we did the CapEx spend on, about a year ago that we expect to come on in the second half, which will put us at about 100,000 motors a month as capacity as for just that line, so additive. We have a smaller facility in Australia. That's really, you see a lot of that same thing with all the other stuff we do, which is, absolutely crazy, a challenge that we have. Drone Dominance was announced December 17th. They need to fulfill in March. Nobody knows if they're going to win till February, but non-Chinese supply chains are six months long. Our real advantage and why this has worked for us so far is we have such a deep understanding of the product that right after Drone Dominance was announced, our product team built reference platforms, tested them, validated them, made the flight, the payload, all the requirements for Drone Dominance, that it would meet them all from a powertrain perspective, not from the AI perspective. That's our customer secret sauce. Did that, confirmed it, and we ordered all of the parts that our customers who don't even know if they won yet, don't know that they need yet, just so that they can deliver their products to the Department of War on time. That's, that's the operational challenge that we have, is we have to know it so well, and we have to believe so hard that we're going to win enough of the business that we have to make choices around the product plan in advance just to have the supply chain show up fast enough, and that is where we've used the capital, we've used our position, we've used our product knowledge to get in front barely of the marketplace requirements, and it's why we're in a really good spot with our customers as a trusted supplier. If we, one slide in your update, the growth strategy slide, because I just want to talk about kind of your guys' visibility and kind of growth outlook as we get into 2026. You're entering 2026 with strong backlog, about $20 million of bookings that you guys had in around Q4. Could you talk about that? Like, what's your visibility? How has the order book changed and going to evolve as we get through the year? If you look at 2025, we started 2025 small, still doing mostly retail through our Rotor Riot channel. Late summer 2025, a budget got passed, the NDAA, and you started to see orders trickle out to our customers in August and September before the government shut down. You then see that manifest in orders to us. We've seen about $20 million in orders so far as we move to fulfill. That doesn't count this Gauntlet program or anything else. At the start of Q3, we started scaling because we saw the NDAA being passed and this energy coming forward. When you look right now, our costs exceed revenue, typically in hardware, because we have to place a bunch of material costs. We have to build CapEx. We have to hire people, and then we're going to build all these motors, but revenue doesn't get recognized till they ship. You normally are going to see this cost scaling function. You're going to see revenue trail it by one or two quarters. And so what you see in quarter four, for instance, is our run rates really started to step up, and that comes from the investments we made at the end of Q2, the beginning of Q3. We're continuing to scale as fast as possible. Right now, our crossover point is probably $40 million a year in run rate, where we are cash flow positive again. But when you look at the top end of the revenue curve, the TAM for just this segment, DJI does about a million drones a year in the U.S., or did before the ban. $500 in parts makes it a $500 million market. The Department of War wants to do a million drones, and it's a $500 million market. We are not focused on the top of the revenue curve. The demand and our customers' requirements for a trusted supplier are overwhelming, and we're focused on surviving the scaling as we go through this corner to get back over to a crossover point. Luckily, we have a great team. Everybody still gets along, and so we're coming through it, and I think that's what we're so excited about, is even in Q4, we're starting to show that we're coming through the curve. I think Q1, Q2, you're going to see us continue to come through that curve, and by Q3, Q4 next year, we will be a completely different company. This is that moment that people talk about, and we're living it, and the way that you know we're living it is because of the way hardware works. You see costs come ahead of the corner. Well, and to that point too, like, I think it'd be helpful because uniquely about UMAC, like, there's a clear path to profitability, as revenues ramp, and so could you just kind of talk about kind of the margin profile of the business, and path to that profitability mark? Yeah, so first I'd say we were profitable in Q3, but ignore that. That's not our goal. When you look, we target at steady state, 40% gross margin. We're built to be profitable at that. We're back to cash flow positive with our current cost structure at about $40 million a year. As you scale like this, margins take a pretty big hit. So you're going to see margins drag for a while, and that's okay. What happens, like I said, we have to order all of this motor stuff based on what our customers need. We cheat a little. We order a few different SKUs. Some may sit around. We may not get as many turns. That way, if we have all the material, we can absolutely be responsive and be a great vendor. We're not interested in profitability yet. As long as we can grow 50% or better year- over- year, you want us to reinvest in growth, right? There's a market vacuum here, but the second we want to, we can slow that down, take those gross margins, and start to distribute wealth eventually. But again, if you look at Amazon's growth cycle, how many years were they just break even or cash, like just neutral there, and now they're a monster and they're able to spin off value? Uber, very similar. So we're interested in being cash flow positive and then growing into this market opportunity as quickly as we can, rather than cutting short the long-term investor thesis by turning to profitability too soon. Okay. Well, and I think, like, the big demand driver for UMAC near term is really defense and these billion-dollar Drone Dominance, PBAS. However, you got an early Christmas gift, when the FCC came out, and the long anticipation was they were just going to ban Chinese drones, but they did a whole bigger list with not only banning Chinese drones, it was foreign drones and foreign-made components. Last Friday, there was a little confusion in the market on what happened with the Department of Commerce, thinking that that ban went away. It did not. Can you just clarify kind of what the FCC ban is and, like, what's intact today? Yeah, the FCC ban. The FCC put out a ban, the same one that was used to ban Huawei, for instance, and none of us probably have Huawei phones in here because of the effectiveness of that ban, just to give you context. It's a really effective process. They put out a ban saying that no new FCC licenses would be granted to foreign drones, foreign not-covered-country, not Chinese, and then foreign drone parts, and they explicitly included motors and batteries and a lot of the things that they don't normally cover because what they're saying to the drone manufacturers is that if you don't even have domestic suppliers for that, they won't give your drone FCC authorization unless you have a plan to move your supply chain. Now, the Department of Commerce was working through similar things as the FCC, all at the guidance of the White House, all to say create a legislatively strong environment to bring back manufacturing, and the Department of Commerce just took theirs away because the FCC created an overwhelming ban, and so the White House was like, well, it's solved. Like, this is one of the strongest mechanisms there is and one of the most effective given the other products that you've seen on the ban list, just not existing in the U.S. anymore. And I think too, like, what's the bigger opportunity with that ban? It isn't necessarily with defense because defense wasn't going to be integrating these components, but now it's going to possibly open up the commercial and the hobbyist market because with Amazon and all these other companies doing more drone delivery. So, like, how does, like, what's the incremental, like, end market opportunity do you think with this ban? Yeah, so I regularly talk about DJI and the drones that they sell in the U.S. a year. Right now, I see three demand waves coming in really quick succession. The first demand wave for drones and drone parts is the Department of War, and in our specific category, it's very much the Gauntlet program, the 350,000 to 500,000 drones that they want in the next two years. What you see next is that the FAA is working on BVLOS, Beyond Visual Line of Sight. So, one to many, you know, all your drone fleets and delivery, and you're just starting to see that legislative environment come around. I think it's about 18 months out. I really personally believe people like delivery. I think food services are probably going to really drive it. Your DoorDash's, your Uber Eats, I think are going to be a big part of it, along with commercial drones like pipeline inspection, et cetera. That market is going to be turned on by FAA regulation in about 18 months. This means Zipline, Google Wing, Amazon, et cetera, are going to have to have fully domestic supply chains. Whoa, that market, unlike a Department of War market, which can be really inconsistent, right? Right now, there's rocket fuel from that market, but who knows what the 30-year element of that is, but 30 years at Uber Eats, that's going to keep going. That's going to grow. And so now we are in a leadership position to address the components for that market. And then, because of the FCC ban, no new DJI products can be sold. That's wedding photography. That's inspection. That's all the drones you see after hurricanes. These things are already used in a very wide amount, and I think the replacement cycle on that is three to four years out, and the winner in that category, the winner of a million drones a year in a consumer category in a scaling market that's already made, is going to have to have an entire domestic supply chain. We have a first mover advantage right now because we assumed that this was a problem that would need to be solved. When you look at delivery, the FAA is not going to allow a burrito to be delivered with an experimental motor. They're going to require a stack of paperwork this big saying, "hey, what's the mean time to failure, the temperature sensitivity, the service program." The scale we get right now from the Department of War is going to give us this data quality moat. In addition to the scaled economic supply chain moat, that is very, very difficult to overcome, and so we're in a spot right now that by taking advantage of this, we create a moat for the delivery segment, and then after that, the data, the scale, the reliability allow us, at a cost basis, to become the number one supplier for that consumer market. Hey, you tell me this. I think it was very unique that DJI actually started out as a component company just like you. They did. DJI started out doing parts. It's a known pathway. We're, in a lot of ways, the Chinese did this consumer electronics and drones better than anyone. And so we don't feel the need to reinvent the process. We can just look at what the winner did and sort of emulate that and take the best things and then add in some things that are uniquely American to build products that fit this marketplace. So also, UMAC has a very strong balance sheet, around $140 million-$150 million in cash, no debt. What's the capital allocation strategy? I know M&A is a part of this. You guys are making direct investments into other publicly traded drone companies or drone players across this ecosystem. Just maybe walk through that and how we should think about that going forward. Sure. So, really great balance sheet. We don't spend a lot of money. We're pretty cheap because we believe that, it's important to be good stewards of capital. The most important thing, and I've said this publicly, is if you're going to operate a hardware business, especially with non-Chinese supply chains, they're very tenuous. They're very challenging. And so you need about one year of forward-looking revenue and working capital that you have to use to buy inventory and everything else. So I think the most important thing we're doing with capital out of the gate is having it to have supplier terms, to have credit terms, to facilitate the challenges that come with these really stretched supply chains. So if you figure $100 million in cash, boom, that's there. That's to do that. That's to run that business. For example, the motors I talked about for Gauntlet, we've had to place $10 million worth of inventory purchases for a program that hasn't been awarded to anyone yet for products for customers that don't know if they're going to even build anything. We can make that choice because of our capitalization and our belief that we're going to win enough business and that these motors are evergreen and we'll be fine. So that's number one use of capital: oh, don't get jammed up. Now, there's also a lot of undervalued or undercapitalized companies in the space, and they're kind of sole source providers. So we invested in LightPath. They're doing non-germanium glass for thermal imaging. Okay, all the rest of it comes out of China. So we kind of want to be able to get to the front of the line if we need to. Kopin's making panels for headsets. Okay, years ago at Fat Shark, we were buying 50,000-100,000 Kopin panels a year for the Fat Shark goggles. And you're looking at us onshoring headset production. So again, there's kind of only one at-scale provider to help with that. We're doing it. If you look at the XTI investment, it was because they bought Drone Nerds. Drone Nerds is the largest domestic channel. So if we believe that we're going to be in a position to help replace DJI, don't we want to have a relationship with a healthy large channel in the consumer market? Don't we want to be sure that that is fostered and grown as we go through this transition? Absolutely. On top of that, because we live in the industry and we understand some of these things, the returns there now put us at a blended return area where we feel like we're being good stewards of everyone's money. Awesome. So we got about nine minutes left. Want to open it up if anyone has any questions in the group? I have a handful more, so I can keep rattling. Nobody's got questions? Come on. All right. Yeah. What percent is defense and what percent is non-defense in the next year or two? The question is what percent's defense and what percent's non-defense? A little bit of a tricky answer. We are B2B2G. We don't do any B2G work, so we have indirect exposure to the government marketplace. Quarter three was the first quarter where we moved from direct sales into B2B. That's almost all defense. I expect the next year to year and a half is going to be 90% or more driven by the scaling functions from the Department of War. That's where the real money's coming in. I think we're about two years away from seeing a blend to commercial. So what I really see as our opportunity is this moment being driven by the Department of War can get us to scale, but then we're going to be able to transition to the commercial and consumer segments. I think that swing is two to three years out and is dependent on us being successful in this first moment. Allan, so now you're focused on, like, lower-cost flight-critical components, but you've talked about kind of going upstream, maybe getting into the powertrain. How, how should we think about kind of new adjacent subsystem verticals you guys are going to think to maybe expand to? The question is, well, no, you're being recorded. We're fine. When you look at adjacencies, we're really focused initially on the powertrain. We think it is the commoditization commoditized aspect that all our customers require, right? They have all these really awesome cameras and brains and comm devices. They all need this thing to fly, and when you look at our product mix, we do everything right now. We do sell batteries, but we don't produce batteries. I've said publicly, and I believe that battery production in 2026 is the next aspect of what we need to do, and then it will give us comprehensive offerings and ability to do the whole powertrain, and that is going to let us do delivery and these other drones because we can build it to match what they need without interfering with some of their IP. Okay. Any other questions? Okay, well, Allan, I guess I would just pass it. Oh, yes. Yeah, I guess my question is, obviously in, you know, it's really building out production in the United States. So, I assume a lot of the drone companies, if you want to build out production, you either have to know that the government will be buying drones or have the government help on the CapEx. That's something we could see in the next year or two where the U.S. government actually incentivizes companies to build production. The question is, is the U.S. government going to incentivize companies to build production? I believe they are right now. I think the signaling, the FCC ban is giving a lot of certainty because those don't get unwrapped. And then the Department of War saying, here are giant orders. And there's a benefit for early delivery. I think they're looking to the folks in this room, to the markets, to take those signals and say, oh man, okay, this can rip. And so I think they very recently have pretty much laid it out. I mean, 90,000 drones in the next year in a single category for a single thing where they're, they just said, we're paying $5,000 a drone. Ultimately, they want the drone to cost $2,000. So they're giving people added margin. And they're saying, do it really fast and you get credit for early delivery. They're just saying, how fast can you actually build these things? They put out this program called December 17th, and they closed it last Friday. They just wanted to see who would respond over the holidays. They're looking for energy and for urgency and for people who are really going to do this. And I think that through the Sky Foundry program, through some of the other things in the NDAA, you saw the direct investment in L3Harris for $1 billion for rocket engines. I think there is no tool that's off the table for this administration to, as aggressively as possible, facilitate this solution. Can I follow up? Can follow up? Can you speak to how that's Sky Foundry and how that impacts you? Sure. Sky Foundry is a part of the recent NDAA where the government is going to go do a review of the drone supply chain. And they say that they'll make strategic investments, et cetera, in there. I very strongly believe that at this point, especially after the Gauntlet submission, that we are going to be one of the early calls in the review process and that we're probably going to be asked, hey, what do we need to get there? And so, it's both a little terrifying to feel like we're that critical as part of a very tenuous emerging supply chain and very exciting at the same time. So, you know, I think what they did with L3 is a demonstration of the willingness to say, let's go. We need this. So related to that and the manufacturing capabilities, 60,000 sq ft, I mean, how does that scale and where are we in two years? And then additionally, just on the incentives, I mean, you've got now 100% bonus depreciation on CapEx poured into the ground this year. So do you take advantage of that? Do you accelerate that? I mean, the incentives are there right now. We at the end of quarter two had 7,000 sq ft of space. We have 62,000 sq ft right now. We keep adding. We're going to add for a battery. We went from 20 people to 85 in headcount. We're going to do whatever is necessary to put in to go as fast as possible. Now, our advantage over our competitors is you can't just turn on. If you want to order the specialty equipment to make motors, you're going to be waiting 15 months. Plus, you have to commit to your design and to a supply chain, and that's nine months out if you want non-Chinese magnets. So we are making those commitments now, additionally for the future as we see these demand signals show up. We think that our positioning, because we're smaller, we're younger as a company, that we think that our opportunity for investors is the fact that we're willing to say that this assumption that this market is going to manifest. If we believe that and we behave as if we believe it, we can get in front of the actual manifestation of that market. So the risk-reward opportunity for an investment in our company is not a traditional financial one. It's the fact that we, in a very thoughtful way, are trying to run out in front of the slow processes of the government to actually issue contracts. We've been pretty good about it so far. We've been pretty right. And if we continue to do that, we'll be in front of everyone else in terms of demand and have great supplier relationships because when they're reactive, we'll have stuff in stock. And so that's really the fundamental approach to this business is we believe in it and we're doing it. And what's really interesting and why we put this out there is we're just at the start of that, revenue corner. And how far it goes? Is it a $500 million TAM for just the Department of War? Well, you would say scale as fast as you can for a year, look around and figure out where the top is and don't worry about it right now. And that's how we're operating. I think that might be a good way to stop. Thank you guys, everyone, for tuning in, and join us for our next track that starts in about five minutes. Thanks, everybody.