Unusual Machines, Inc.

Greetings and welcome to Unusual Machines first quarter 2026 financial results conference call and webcast. At this time all participants are in a listen only mode and a question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference please press star zero on your phone keypad. Please note this conference is being recorded. I will now turn the conference over to Christine Petralia, Investor Relations for Unusual Machines.

Thank you, Operator. Good afternoon, everyone. With us today are Unusual Machines CEO, Alan Evans, and CFO, Brian Hoff. During this call, management will make forward-looking statements, including statements that are expectations concerning the demand for our products, our ability to manage this demand, the growth of our operations, our business, and our revenues, the growth of the NDAA compliant drone market, our anticipated growth margins and future costs, our plans to scale manufacturing capacity, including the timing and success of new production lines for motors, batteries, cameras, and headsets, our battery manufacturer acquisition, our ability to achieve cash flow positive operations in the future, and expected 2027 FAA rulemaking. The results expected by some or all of these forward-looking statements may not occur. Factors that affect our ability to achieve these results, including the risks that enough of our customers receive orders under the drone dominance program or other government programs, and in turn place component orders with us, as well as potential funding reductions, program delays, or changes in procurement priorities. Our dependence on a limited number of enterprise customers and the risk of customer concentration. The risks that our inventory buildup will become obsolete or that we cannot sell such inventory at reasonable margins. Our ability to manage our rapid growth, including integrating new employees and maintaining quality control. Risks relating to manufacturing bugs, delays, or failure to achieve anticipated production efficiencies. the availability of satisfactory labor pool to meet our plan growth, potential supply chain disruptions or component shortages, the impact also from tariffs, including inflation and increased costs of goods sold, the risk that our automated production equipment may not be operational on the anticipated timeline, unanticipated audit issues relating to upgrade energy, technical or political risk that may affect FAA rulemaking, and the risk factors contained in our 410K for the year ended December 31, 2025. Factors or events that could cause our actual results to differ may emerge from time to time, and it's not possible for us to predict all of them. Any forward-looking statement made by us herein speaks only as of the date of which it is made. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by law. As a reminder, this call is being recorded and the replay will be available on Unusual Machines' website at www.unusualmachines.com. Now, let me hand the call over to CEO Alan Evans. Please go ahead, Alan.

Thank you, Christine. Good afternoon, everyone. Thank you so much for joining us today. We really appreciate your time. I apologize if I'm a little bit hoarse. I've been at the trade show AUVSI all week and talking to a lot of people. Anyway, during this call, I will discuss our first quarter 2026 performance. In quarter one, we generated approximately $8.1 million in operating revenue. This was a 296% year-over-year growth from the first quarter of 2025, and a 65% increase from the revenue generated in the fourth quarter of 2025. In addition, we generated $10.3 million in net profit for the quarter. What's really key here is even if you move, remove from that 10.3 million in net profit, the unrealized gains, if we exclude them, we still ended up being profitable. And we've also really dramatically increased revenue for the first quarter. So the quarter one results just start to show the dramatic growth that we're at the early stages of. Every single business indicator that we're seeing is pointing to growth. We were able to jump from 4.9 million in revenue just a quarter ago to 8.1 million in revenue this quarter. And that's without the benefit of Christmas driving high consumer demand. We've increased our headcount from 81 employees to 141 employees across the quarter. And we continue to grow the team as we move forward. We saw the expected drop in margins as we added all these new employees and we still, the team did a really good job and we managed to still hit a 32% gross margin, which is a little bit above where we expected to be. All of these trends that we've seen in the first quarter are continuing through now and we're still scaling as fast as we can to meet the needs of the marketplace. In the first quarter, we were able to really secure our war chest to be sure that we can manage the working capital and finances growth, which normally requires some cash in front of seeing the revenue returns. We raised $150 million of $17 a share in a confidentially marketed public offering, and we now have about $320 million in total working capital, which puts us in a very strong position. We very recently entered into an agreement to purchase Upgrade Energy, and that's a total of just over $50 million in a blend of cash and stock. That's there to accelerate our battery ambitions and bring a new product category to market faster. It's, I think, really important in all of this to remember that we're not seeing this growth by burning cash. So this money remains in our war chest, remains in our bank accounts, and can be used to really foster and turn over the growth rather than just to fund operations. The first quarter was our eighth consecutive quarter with record revenues. Since going public, we've never had a quarter where revenue has gone backward and we don't expect to have one anytime soon. So this sort of constant success is just not possible without our entire team putting in a lot of really great work. So everyone is working hard, bringing just fantastic energy to all the different challenges we face as we go through this. And I'm confident that we can continue to handle this really fast rate of growth because I'm confident in the team and in each person doing the job that they're doing. So I very much have the pleasure with and do want to say thank you to everyone working at Unusual Machines for continuing to make this possible. I'll now hand this off to our CFO, Brian Hoff, to cover our financial results in detail And once he finishes, I'll go into more detail on our going forward plans. With that, I'm handing the call off to our CFO, Brian Hoff.