Welcome to Alpha Wolf Capital. I'm Tim, and I want to personally thank you for stopping by. This channel is designed to help small companies, both public and private, gain exposure with potential consumers, investors, even partners. Take for example today's guest, CEO Allan Evans of Unusual Machines, ticker symbol UMAC. Unusual Machines is in the envious position of being a US drone part supplier, one of the very few US drone parts suppliers. They are in the process of building out a 17,000 square foot facility to manufacture drone motors right here in the United States. As we move into 2026, Unusual Machines is going to be a key player in the drone component industry for US-made drones. But I'm going to let Allan tell you more about that in just a minute. 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, Tim from Alpha Wolf Capital coming at you with a surprise guest. Man, Allan, it feels like I just talked to you not too long ago.
It was a week ago, which is like six months in startup time. You know, the world changes pretty quick and there's certain things I can't talk about until they're public.
And that actually came to surface this last week. There was a couple of things that happened. You're a pretty sneaky guy, man, pushing these things through.
You know, it's not sneaky. Again, we look at it like startup time, like we're in a window where you got to go fast and these things come together when they come together.
So let's, for anybody that doesn't know, this is Allan Evans, CEO and founder of Unusual Machines, UMAC is the symbol, and just had him here last week. We had a great conversation, and now a couple of things changed. You had the potential acquisition of Aloft that dissipated or didn't—
Yeah, we terminated it. So some nuance there for people who are curious. Really like the Aloft guys. Great relationship with the team. The executive orders really accelerate beyond visual line of sight and FAA changeover. And so those came out and we went and said, "Okay, this has to go one way or another." And they just weren't able to get all the closing conditions met, and it was kind of uncertain whatever timeframe it would be. So we said, "Hey, look, would love to do stuff, but now that the timeline's collapsed, unless we can close right now, we can't integrate and be in a position where we feel super confident about driving positive outcomes from that." So we all walked away. It's always a bummer. Love those guys. Think they're really smart, you know. But sometimes when timing changes and you look at it, you have to say, if we're going to do this acquisition, are we 75 to 90% sure we can nail it? And with that accelerated timing, if we had closed still right away, we would have felt really good about nailing it. But letting it drift like another quarter to finalize conditions just started to move us into a place where we force integration and all that stuff and do it quickly. It felt too risky, and they're better served, too, positioning for the changes this way right now. There's not this uncertainty out there. So just for everybody involved, it ended up being like a hey, we have to make a decision right now. And it just didn't work out for us to close, but really driven by the executive orders instantly changing sort of that landscape.
I think also what that did as well is—I mean, but it seemed like you had another solution there, which is the acquisition that you announced at the same time that you were announcing that the Aloft kind of fell away, right?
Yeah, it's nice when these things come together all at once. It looks planned, but it was a little bit coincidental. Rotorlab is the company that we've been working with as a supplier, NDAA component supplier for a long time. You know, a deal like this doesn't come together super quickly. We've been talking to them for about the same amount of time, actually, as Aloft, and partnering with them and doing that sort of stuff. But really—and I just showed you a picture a minute ago—our equipment is shipped. It's the same equipment they have there. We have a facility in Florida.
In the last interview that we did, that you had a supplier that had the same equipment, I should have put two and two together, you know.
Yeah. I mean, yeah, two and two plus the secret two I didn't talk about, you'd have got to four instead of six, so don't feel too bad. Anyway, so we're able to ship motors right now. All the work is being done, the supply chain set up. We've also placed orders for all the components already because maybe we know the vendors, and you know, a great team over there of designers and people to run motor stuff. So it'll actually—this is why when people are like, "Are you sure about September for our motor factory being online?" Equipment's on a plane to a place set up now with recipes we already make and can ship, you know. September still feels pretty reasonable for when we'll ship, you know.
The only thing you probably have—you got the electricians to come out and hook the equipment up?
They're scheduled for next week.
Because we got to go in and redo the box and do a little bit of build-out so it'll be ready. And they're lined up, so yeah.
We should be okay. I think equipment will be on and we'll be making terrible products in August, you know. We'll get our QC stuff, our fixturing all set up. And the nice thing is with this acquisition, the same equipment, same supply chain stuff, and the expertise could be transferred. So not only do we have redundant sites—so if something happens, we can ship here or there if tariffs get weird—and they're not in like a weird—
Where are they located at?
They're in Canberra. So they're in a pretty normal place, the capital of New South Wales, I think. But what's great is like let's say in this whole European tariff spat, like Europe's like, "100% tariffs on the US," okay, we can fulfill out of Australia, or it leaves us with some flexibility in really how we operate and what we do, giving us NDAA-compliant supply chain right now. And the team there is really great. Went over there in January because we don't do any of these things without—it's a lot about people. I mean, I think luckily I've been reasonably successful at integrations, like above a 50% hit rate, which I think is pretty good. Some of them have failed, as they do, but when you look at it, a lot of it is really aligning people, objectives, attitudes, aspirations. And I think we've done a really good job of that. And we get along great with those guys. And a lot of integrity on our side, right? The deal was a handshake deal over dinner in January. The deal got written up by the lawyers and looks a lot like a handshake deal over a dinner in January. And so I think there's a lot of that that's important, too, is even that builds trust, right, and starts to build collaboration. So really excited. The only closing condition there, which I think is much more likely to happen and not get interfered with, is Australia has to approve foreign investment, so it has to pass the Foreign Investment Review Board. That's pretty much the only thing in the way, but in the interim, we have like a working contract and we got it all figured out, so it's happening.
So with the executive orders and with—and you indicated this in our last conversation—that things are going to start to get hot and heavy again at some point in the near future, right?
Yeah. Well, I would say, you know, we did that raise at $5 a share. Through some of the different alliances we're part of, like AUVSI and other stuff, we had awareness that there was expected to be executive orders. So, as I like to remind everybody, whenever the company directly sells equity, we try to maximize the potential of positive outcomes for those investors. It lets you keep building your investor base because hardware requires a lot of energy and you got to staircase it to get there. The executive orders drove a lot of volume and a lot of interest in the drone sector in general, like us, on this Red Cat, and I think people are really happy with that. And now we're entering a little bit of a window of uncertainty, and I mean that as uncertainty good or bad, right? I think you could have DoD news on SR for Red Cat, or on orders, or on whatever. We're getting into the like "any day now" category with increasing probability through August and September. You're seeing the conflicts, different conflicts sort of shape the narrative a little bit in different places, and I don't know how those are going to evolve. You're seeing then what I think will still be tariff uncertainty. And then lastly, I think you're going to see quarter-two numbers from drone companies that are, based on the recent valuation changes, be a little disappointing for quarter two. So I think if you see the government money come before the middle of August, you're going to see this euphoria spike and people will ignore quarter two. I think if the government-driven euphoria comes after the middle of August, you're going to see investor fatigue over the summer, low-volume boredom, and then earnings where people are like, "This is never going to happen," right? And then the government money will come in and we'll see a spike on the other side. So right now, in terms of if I'm an investor, which are most of the people watching this, I think normally I have a pretty good idea to tell you where to position short term. I don't know. I have no idea.
I think anybody that's trying to time this, I would be very, very, very, very careful about trying to time it. I'm not sitting here watching every tick of you and Red Cat. I'm just not, because this in my head is a long game, right? This is just getting started. I mean, 2026 is going to be a pretty important year for drones.
I appreciate that, and we look at it the same way. I think some people want to trade on a monthly basis. Love you guys, too. We love the volume, so I'm not going to bash anybody here. If you can get a tidbit to change how you want to time it, I'm here to give it to you. What I would say is right now, I do not know. If you told me I had to make a decision, I might allocate half now and then either cost average down or cost average up depending on how the timing moves in that September time window. Just don't completely get out of your position. That's what I would say. Do not completely get out. You want to lighten up, fine. But don't get completely out. That I think would be a big mistake.
I don't know. I mean, it depends when you plan on getting back in. That's the thing, right? Everybody thinks they have a plan until they get punched in the face and then they don't have a plan anymore, right? Unless your plan is to get punched in the face.
You walk in running your mouth, you just try to get smacked once to see if you can take a hit.
Yeah, hey, that's what life is all about, man. It's how many hits can you take and keep getting up, right?
Yeah, I look at it a little differently. The way I describe many of these things to somebody is I look at it like a road trip before the cell phone would tell me exactly where to go. I look at it as a road trip from Los Angeles to New York, and there are a whole bunch of different routes, and you might get bad weather and you might have to adjust and you got an old-fashioned map and you got to figure it out. You might get lost a little bit, but it doesn't matter exactly what route you take. They're all kind of the same to get there, you know? As long as you're committed to continuing to go east, you can make it.
Yeah, that's true. That's true. I like it. It's kind of the same thing.
Yeah, you got to stop and fill up with fuel once in a while. You don't want to have to push the car or you run out of gas. You see that like what bankruptcy looks like.
Inclement weather, you don't want to deal with that stuff.
No, and I just all view those as market forces on the drive. I'm like, "Oh, what happened here?" But like that sunny day with a slight downhill, you're like, "All right, we're ripping today," you know?
Yeah. All right, so I'm going to say, and I'm just going to throw this out here, you did have the plan, and I understand the executive orders shrunk the window and makes it more challenging. I'm just going to assume that I think Allan has an overall master plan of what you ideally would like to put together because in your mind, I think maybe I should say what I think: I think you have a clear lead of being the parts player in the US, right?
I think we're looking pretty good. We're definitely there for the value segment. There's some really great premium parts companies out there that we don't really compete with; they offer something different and they're great. So we work with a lot of them and blended stuff which is there. But I think really if you take a step back and we go back to my road trip analogy, we're still all in California. Nobody's anywhere near New York. And what the final destination is here is really being able to replace the DJI Mavic. Like the Chinese company DJI, that Mavic in Best Buy is incredible. It's a great price, great value, awesome software stack, all this other stuff. And I think the goal of every US drone company that is not focused on full-scale defense stacks—so isn't an Anduril or isn't a Red Cat that is looking to be more of a defense prime—but all the rest of the drone companies, the Skydios, the BRINCs, the parts companies like us, the entire endpoint is being in Best Buy next to the Mavic for the customer at the same price where they pick it over the Mavic. And because the FCC ban doesn't kick out DJI, it just means they can't put in the Mavic 5. But until somebody can do the Mavic 4 and be next to it and be USA made, we haven't caught up. That's really what it looks like. And that requires—that's a giant hardware company. They probably do $5 to $10 billion in sales a year. And to get to that scale and that quality to be competitive requires this virtuous cycle and the stackup, right? Everybody's like, "Okay, would you do acquisitions? Would you do this? Would you—" Yes. As we were talking a little bit before the call, it is Highlander: there's only going to be one company to do it, and that company is going to be a multibillion-dollar company. That's where it's going. In three to five years, we need to be there. And so if we remember that that's New York, okay, Aloft was one direction on the way to New York. The bridge was washed out. All right, pull out the map, start to go a different way, and that's how we see it. We think we're taking the parts supplier route because without a low-cost, high-quality supply chain, you can never have a low-cost, high-quality product. I think we have a path that way. Other people might get there, and some people will fade away. You'll see different mergers, you'll see consolidation, and you're going to see all this in the next three years. It's going to be intense because there's a market vacuum, a multi-tens of billions of dollars market vacuum product demand created and no clear company that is ready to do it. Not yet, not yet. So it's Highlander, you know, the first movie.
I love that movie, man. I love Highlander. It was freaking great. There can only be one.
There can. And I think after this defense cycle come next March, there'll be fewer people left to qualify to be the Highlander.
Well, except you don't have to cut off their heads, you just absorb them.
Yeah, maybe if Highlander was a Japanese anime, a little more collaborative.
Yeah. So let me ask you a question, and I'm just going to bring this up because I don't know if everybody remembers, but do you have a shelf?
Yes, it's a very big one.
It is a big one, isn't it?
People may ask, why in the hell did you do such a big shelf?
Yeah. And what have you shown, Allan, thus far with the money that you have raised? Now you've got 40 million in the bank, right?
Where did you do that raise at? $5 a share, common only. Where's the stock at? It's been trading in the $10 and change, right? So those people are happy.
