Aloft Gives $UMAC A Broader Impact in the Drone Space!

We went to go check on all our component suppliers and some other international partners. For instance, like our new NDAA-compliant camera final assemblies in Taiwan. And so just go review everything to be sure that we're not getting reboxed, where you know people buy in from China and trade it out. One of the really neat things is in, like, Taiwan they call it 'no red' — they have their own rules for not-China, and they have a different language everywhere. It's pretty funny. In India, all the Indian companies have a no-China supply chain stuff if they're doing anything in the way. So it's really interesting to go just check on everybody. And it used to be you'd go to China and just go into Shenzhen and that was, you know, your whole supply chain visit, but now it's distributed all over the place.

Yeah, went better than we expected. I think vendors at different levels of sophistication — you know, met some of our partners in the US too. We were out in California as part of it, and generally speaking we feel pretty good. And like somebody could come bed us and go all the way down the chain and we'd pass.

Yep, our motor controller and ESC, which is an electronic speed controller, just got put on the blue list. That'll be available for sale. We're targeting March. We're just doing some final testing and ramping that up. Our camera is now for sale. We've sold a bunch of those. That's NDAA-compliant. That's submitted for the blue list, and we have other parts in the queue still. Yeah, trying to get a whole blue FPV drone, all the parts fled, done as quickly as possible.

We're the partners for the Fang, and so you see some 7-inch drones. We're getting pretty close. And really what's great is once all the parts are blue and the drone is blue, you can trade out blue parts for other blue parts and you don't have to recertify the drone. So we're really just trying to get a first one out there so that Red Cat or other partners can sort of configure it then how they want by taking out sort of the stock parts and building whatever they think is necessary for their end customer.

Yeah, so we recently announced our definitive agreement with Aloft. I'm super excited about it. Had to keep my mouth shut for a long time because when an entity is 70% of the market and doing new things, if you talk about it, I would have gotten myself a bidding war with private equity or others who saw the value. I've known John and Josh, the founders, for a long time. They're super smart. I'm super excited to work with them and really excited about their new Airboss product, which really lets everybody in a jurisdiction share the right amount of drone information with each other. So like in New Jersey, nobody knew what was going on, but if there was Airboss — like CNN is already a customer, Fox News is a customer, individual pilots use it to log in — and then police and fire and hospital flights can all share the right amount of data and not have to share exactly what the mission's for or anything. But then somebody in the governor's office could have worked, you know, when they got a phone call and been like, 'Oh yeah, no, that flight's legitimate.' They don't need to know if it's a three-letter agency or whatever. If it's in the system and the right flags are there, then nobody has to worry about it. So very excited about that coming out.

It's, we call it a paper swap, not an exit. Like you're going to trade your equity for some of this equity and we're going to keep building, and there's liquidity there and they can be part of a bigger engine. And so it was all stock except for I think like 40 grand that we had to pay out to unaccredited investors just to not, you know, do anything silly. So yeah, like wait for all stock for a company that meets our profile, which is generating revenue, going to be cash-flow neutral. We have by far and away a market leader in the domestic segment. And I think in the hype around the defense markets, which is valid, everybody's just ignored the Countering Chinese Communist Party Drones Act, which is going into the NDAA, which kicks out all the Chinese drones from the US domestic market. And that's like 5 to 10 billion a year in just hardware sales. So it just feels like it's an ignored segment, so we just decided we'd go there first. There's a whole lot more drone flights than there are airplane flights. There's only about 40,000 airplane flights a year, right? There's, you know, millions of drone flights that go up and down. And so when you look at the future airspace and coordinating, you know, it's I think going to be amazing.

You know, the sky is really big, and for a long time we've operated on Big Sky Theory, where in 3D space it's hard for things to intersect without seeing each other. But now, like, okay, now we need some traffic lights in the sky and basic 'let's all drive on the right' kind of rules. And the FAA is looking at putting that together over the next two years for Part 108. And once those come together and get integrated, that's really going to open up the domestic market. That's going to be BVLOS and all these other things. And we're, you know, at Unusual Machines, like, defense is important. It's important for us to build in the US for those defense customers, but we don't want to get so distracted by defense that we miss what is the monster opportunity, which is like autonomy in the US market. And when you look at the current administration with Musk and Trump, and they're really pro-drone, but they're also pro-autonomy. And I think people from a macroeconomic perspective dramatically underestimate the deflationary power of autonomous logistics. So I did this math last night with an investor. I'm like, how much time do you think US people just spend in a car in a day on average? So it's an average of an hour a day per person driving. That's 300 million hours a day. Okay, let's just say we pay everybody 30 bucks an hour. That's a billion dollars a day. Like autonomy — even if you're sitting in the car, you like watch a show or whatever, or something delivers to your place instead of otherwise, but it doesn't require a person — is a billion dollars a day of deflationary pressure directly, not counting reduced accidents, changes in medical. Like, man, when you look at this current administration versus before, I think autonomy is coming 5 to 10 years faster. I think we're going to accept regulatory stuff that cuts it down, that enables it, both, you know, drone autonomy and ground autonomy. And I think the deflationary pressures from some of those infrastructure aspects coming into play are going to drive just wildly positive economic outcomes. So I'm, you know, when I look at that whole thing, it makes us even more interested in looking at the domestic drone market and obviously grabbing the super-majority market leader in a category where 100% works best for everybody.

Nobody's heard that. Nobody's ever heard that statement.

Yep, it's all software, recurring revenue. But what I think — one of the things, and I totally agree with you, and a lot of people are excited about it — by doing the hardware, we can control through what we do the quality and consistency of data. So now we're in a position to not even have unstructured data, but to have structured data, and to be sure that what we need out of all of this, whether it's remote ID or anything else, to be sure the skies are safe and effective, is we don't have to go back in and try to parse through, you know, a million different formattings or whatever else. So by doing the right hardware pieces, we actually can empower a much better, cleaner data set and a faster future.

Yeah, you just like — this is one where I had to keep it in the pocket because, like, you know, even if you just look — if private equity went and bought them as DJI replaced, they would know what companies to go buy before those companies knew where they were winning segments. So I mean, this is — you just couldn't tell everybody, like, well, drone future domestically is this. Parts are part of the solution. I mean, if you want to be like cute about it, you could call it Sky or something. Like in IoT, you need both the components and the data, right? And so I think when you look, that's really the future. These are robotic data aggregators. And then past that, their delivery, their — you know, I think there's a lot of really interesting things that are coming. I think it's coming faster than people think under the current administration because of the deflationary value that it brings and the economic growth that comes with it.