Welcome to the Alpha Wolf Impact Club. I'm Tim Winrout and this is where we shine a light on small companies with big ideas. Our mission here is crystal clear. We want to identify, support, and champion game changers. Those companies that are tackling massive challenges, revolutionizing industries, saving lives, or making us more efficient. For example, today we have Allan Evans of Unusual Machines. Unusual Machines builds high performance US-made drone gear. They have Fat Shark goggles, Rotor Riot parts, driving secure government approved drone tech for defense, racing, and rescue. They're boosting America's drone future with two big plays: a strategic investment in LightPath, an advanced optics company, and a $25 million stake in XTI Aerospace, vertical takeoff aircraft, and big-time drone distribution with Drone Nerds. UMAC matters because they're building smarter, safer skies, protecting jobs, data, and next generation technology. UMAC without question is an impact company and I'm going to let Allan tell you more about that in just a moment. This is not to be taken as investment advice. I am not a certified financial planner. This is for education and entertainment purposes only. I encourage everyone to do their own due diligence.
Hey everybody, welcome to the Allan Evans Show, part two. Part two, I think, of this week.
This used to be Alpha Wolf Capital, but we're going to just call it the Allan Evans Show from now on.
Tim and Allan. Tim and Allan. It's better. Little reminiscent of a 1990s comedy legend. Tim Allen. We put an 'and' in there.
We just did a thing and it was, you know, a long one again.
I know this will be a short one. We're committed to under three hours.
But you had news which I thought awesome news.
Yeah. We did a big investment in a company.
Yeah. You want to talk about that?
Sure. Sure. So, XTIA, Scott over there, he's a good guy. They just bought Drone Nerds and they're going to raise some money around it. Now, Drone Nerds is like the biggest commercial distributor of drones in North America. They're huge. They're doing like 100, 120 million in revenue. They're profitable. Jeremy over there is great. So, they were acquiring that company for $40 million. And what's really interesting about this deal is there's no way we could acquire them for $40 million because XTI has got a market cap like 45. And so, when you look at the stock appreciation value for the owner of Drone Nerds, it's real, right? Like this thing goes to $500 million market cap. Boom. He's, you know, 10x on his 99 percentage. Reminded me a lot of when we combined Fat Shark with Redcat Holdings, right? We were doing more revenue. We did it at a discount. We uplisted, got some stock. It worked out great. But so people are like, 'Oh, why wouldn't you buy Drone Nerds first?' Not the same, you know, we're trading a little better. We're in a position we don't offer the same like rip roar and upside but what was great is we were able to go in because hey we'd have done it for $40 million an awesome company they're in pole position there but so we you know they were looking to raise some money to help expand this and stuff and I was thinking about it and you know talking to those guys and talking internally and we realized we couldn't just be an investor we had to do the whole round and we had to do the whole round because either it's going to work and it's a great investment. Love those guys. Be super supportive. Or let's say the market hates it. Well, I'm halfway to owning it and I'll get the rest at a discount and I'd love, you know, like would we put Drone Nerds in with Rotor Riot and have, you know, 100 plus million dollars in revenue and then with DJI being moved out of the market in January, DJI beats up everybody's margins and also makes it a little easier for companies to kind of know what they're going to buy. Once they're gone, Drone Nerds becomes even more important in the marketplace because people need training. They need to go figure out the solution, but also margins get better, right? So, like this big revenue company is about to enter a place where customers need them more as the sales guys and they're going to get better margins than what they've been squeezed down to. And they already figured out how to be profitable. So, either it works, which I expect it to, or I get to buy it at a discount, which is a pretty damn good plan.
Yeah. Well, that's why we did it. And I like those guys.
That makes sense, right? I mean,
I thought so. We I mean, it took me a long time. I was thinking about it. I'm like, can we put $10 million into this deal? And then you're like, well, what if it doesn't work? And I'm like then I kind of I wasn't a good steward of our investors like you know of our extra capital. I wasn't doing a good job. So I thought okay like how do you how do you really do it? And then I realized wait if it doesn't work my way out is to just go all the way through.
