Latest / WTR Small-Cap Spotlight / Mobilicom (MOB): CEO Details Why Mobilicom’s Secure Comm System is the Heart and Soul of Drones and Robots

Transcript

Mobilicom (MOB): CEO Details Why Mobilicom’s Secure Comm System is the Heart and Soul of Drones and Robots · WTR Small-Cap Spotlight

• 0:00
  SPEAKER_01: Welcome to the WTR Small Cap Spotlight Podcast.
• 0:04
  SPEAKER_01: I'm your host, Tim Gerdeman, Vice Chair and Co-Founder and Chief Marketing Officer of Water Tower Research.
• 0:11
  SPEAKER_01: In today's podcast episode, I'm being joined by Orin Elkeim, CEO Mobilicom, Nasdaq Ticker Symbol MOB.
• 0:20
  SPEAKER_01: Mobilicom is a provider of cybersecurity software and hardware solutions that connect and secure drones and autonomous systems.
• 0:28
  SPEAKER_01: Mobilicom secures next generation military and industrial platforms against modern electronic warfare threats and is becoming an increasingly important supplier to U.S.
• 0:38
  SPEAKER_01: Tier 1 defense platforms.
• 0:40
  SPEAKER_01: Also joining us is my WTR equity research colleague John Roy.
• 0:44
  SPEAKER_01: Good morning, gentlemen, and thank you for joining today's podcast.
• 0:48
  SPEAKER_01: Nice to see you, Tim.
• 0:49
  SPEAKER_01: Oren.
• 0:50
  SPEAKER_01: Thank you for having me.
• 0:52
  SPEAKER_01: So, Orin, uh, for those listeners not familiar with Mobilicom, can you please provide a quick overview of the company's business model and corporate strategy?
• 1:02
  SPEAKER_00: Yes, obviously.
• 1:03
  SPEAKER_00: So when we are presenting Mobilicom, which we are in a unique position in the market, uh, I would like to say that Mobilicom is the provider of the key essential cyber, software, and hardware elements that are sold to drones or robotics manufacturers.
• 1:20
  SPEAKER_00: Those are the critical systems within the drones or robotics that enable them to operate, enable them to communicate, enable them to safeguard themselves against different threats.
• 1:30
  SPEAKER_00: So it could be considered that we are the heart and soul of the drones or robotics space.
• 1:36
  SPEAKER_00: Generally, our business is divided across two different segments.
• 1:40
  SPEAKER_00: We have one is different hardware solutions.
• 1:44
  SPEAKER_00: So we have uh the data link family of solutions, we have networking solutions, and we have ground control systems, which are the foot in the door.
• 1:56
  SPEAKER_00: This is how we start and interact and integrate those into platforms, and that is the typical uh business model of selling this hardware with our unique IP and technology inside, and we are making gross margin between 50 to 60 percent, which is very steep to hardware business.
• 2:15
  SPEAKER_00: On the other hand, the new solution that Mobilcom introduced over the last two years, which is the electronic welfare software, the cybersecurity for the AI autonomy of the zone drones and robots, and secured autonomy ecosystem solution, are all software license-based solutions, which means that they have a typical gross margin of up to 90%, which is very steep.
• 2:43
  SPEAKER_00: And over there, we are market leader by the fact that we help creating the standards, um, advocating with that, and with the government in the United States, and then uh releasing the first two product to the market that meet the small size drones, robotics, and loitering munitions market.
• 3:02
  SPEAKER_00: So Mobilicom essentially is a one-stop shop of the critical software, cyber, and hardware solution, uh, selling to all uh drone manufacturers and robotics manufacturers in the world, and in particular in the United States.
• 3:17
  SPEAKER_01: Great.
• 3:17
  SPEAKER_01: Well, thank you for that thorough overview to state the glaringly obvious you're operating in a really hot space.
• 3:22
  SPEAKER_01: So I'm excited to hear uh John ask you some questions, a learn more about the business.
• 3:26
  SPEAKER_01: John?
• 3:26
  SPEAKER_01: Great.
• 3:27
  SPEAKER_02: And how's you talking about the U.S.?
• 3:29
  SPEAKER_02: So the Department of War's drone dominance initiative really has a potential to really change the U.S.
• 3:35
  SPEAKER_02: drone supply business.
• 3:37
  SPEAKER_02: So, what does drone dominance mean for mobilicom in in really in practical terms?
• 3:43
  SPEAKER_00: I will start at that the major uh market for us is mainly the one above drone dominance.
• 3:50
  SPEAKER_00: Uh, if you share the different categories of the drones, we have you know, group one to group five, group one being handheld uh kind of solution, uh several pounds in weight, uh half an hour, one hour of uh endurance in the sky, roughly systems that are$10,000,$20,000 per system, uh, that are sold to different um, let's say, branches of the Department of War.
• 4:17
  SPEAKER_00: And then there is group two, which is uh backpack size, uh 25 to 50 pound, uh, usually endurance of uh more than an hour, two hours, three hours depends on the platform.
• 4:30
  SPEAKER_00: Uh, systems roughly costing between$30,000 to$50,000 a system, sometimes more, depends on the sensors.
• 4:37
  SPEAKER_00: This is the area of focus of mobilicon.
• 4:40
  SPEAKER_00: Group five, as you understand, are jumbo jet size or aviation side.
• 4:44
  SPEAKER_00: So we are focusing on the small side of the bit of the platforms because A, we believe that this will create the biggest revolution in volume and value, and B, because of the replacement rate, those elements are going to be damaged very fast.
• 5:00
  SPEAKER_00: We understand that every two, three years, every corp or every um uh platoon will have to replace the entire fleet because there will be damaged very fast.
• 5:12
  SPEAKER_00: Therefore, this is the most interesting business because you have recurring uh revenue by the fact that you have to replace the fleet very often.
• 5:21
  SPEAKER_00: I all um I'm using a lot the analogy that you have something, the system cost is in the cost of Tesla, very sophisticated Tesla, but the replacement rate is like replacing your iPhone every two, three years.
• 5:35
  SPEAKER_00: And that's lucrative market opportunity.
• 5:38
  SPEAKER_00: I haven't seen something close to that.
• 5:40
  SPEAKER_00: Uh, so you this is the focus, group one, group two drones, FPV drones, okay, which is trying to duplicate the success story of Ukraine, uh, is one tier below that.
• 5:52
  SPEAKER_00: Uh, we all know how it started by you know drone racing, hobbyist drone racing solutions, small platform, very quick, very cheap, uh, small endurance in the sky, uh, exciting, crazy, but um was not really relevant to the defense world until Ukraine have changed it dramatically this market, and now United States with a drone dominance initiative or program is trying to change that.
• 6:18
  SPEAKER_00: Um, there will be different sequences of drone dominance um solutions.
• 6:23
  SPEAKER_00: What we understand behind the scene is that the early days design was not relevant for mobilicom.
• 6:29
  SPEAKER_00: Our drones in$3,000,$5,000, uh, very non-sophisticated communication, encryption, electronic welfare, uh, cybersecurity, all of that was not relevant.
• 6:41
  SPEAKER_00: But they understood, and they being the office, understood that they cannot continue like that.
• 6:47
  SPEAKER_00: On one hand, they are increasing the requirements.
• 6:50
  SPEAKER_00: They want the drones to be right now not with analog communication that you can um you know intercept easily, you can listen to it easily, you can crack it easily, you have to move to digital data link and communication with SwanShift.
• 7:05
  SPEAKER_00: You wanted to have all the encryption methodology, you wanted to have all electronic welfare resistance against jamming, interception, spoofing.
• 7:13
  SPEAKER_00: So now you are becoming a higher league of a drone.
• 7:16
  SPEAKER_00: You wanted to work not one to three kilometers, five, ten, twenty kilometers.
• 7:22
  SPEAKER_00: You wanted to support safety of um um you know, uh loitering, uh kamikaze capabilities with payload of bomb, which means safety and and communication and security much have to be harder.
• 7:35
  SPEAKER_00: You wanted to be easily monitored and operated, so you mean the pilot has to be not a savvy racer, but someone that is able to do it like any soldier in the field, which means that you have a flight computer, an autonomy flight computer that will help them guide it and so on, and then move to fleets and swarms in the next phases.
• 7:54
  SPEAKER_00: All of that means that the price will not be the same.
• 7:57
  SPEAKER_00: You cannot start and now saying, okay, I want a Porsche level and then charge IKEA prices, or I don't know what to say, I or Ford or whatever we want to say, okay?
• 8:08
  SPEAKER_00: But this is the idea behind that, and and they are understanding that.
• 8:13
  SPEAKER_00: Uh, we spoke with these offices a week ago or two weeks ago.
• 8:16
  SPEAKER_00: Uh, we understand, and working with different uh providers and competitors and the ecosystem partners, it seems like the drone dominance is going through revolution, and they will have higher-tier drones like the 20 kilometers, like the lower incoming CASI drones, that the price will be different, or the price that they set will not include the data links or electronic welfare or the payload of the bomb.
• 8:40
  SPEAKER_00: So it means that the price of the system is much higher.
• 8:43
  SPEAKER_00: And therefore, it's opened the door for mobilicom's uniqueness, credibility, capable solution to the market.
• 8:49
  SPEAKER_00: I would like to say that they all changed the regulation.
• 8:53
  SPEAKER_00: If you carefully read the recent uh drone dominance uh phase, Gauntlet 2, okay, they already said that a data link-wise, they want digital, encrypted, uh, and electronic welfare, which means that they are aiming for those that are able to provide it with blue UAS, NDAS certified, local production in the United States, and so forth.
• 9:19
  SPEAKER_00: So now we are back to almost, I don't know, five vendors that can do that today, which mobilicom is one of five, and that changed dramatically the opportunity for us because they guided those people to those that meeting all the regulation certification in America, uh, endorsed and already have the credibility and US product with US manufacturing, which is mobilicom.
• 9:42
  SPEAKER_00: Uh, and on the other hand, they also allude to cyber security items.
• 9:47
  SPEAKER_00: When they will come to deployments in January, I mean in the beginning of 2027 and middle of 2027, phase three and phase four, they require new cyber capabilities to test the platform to align themselves with different things, which makes our OS3 operations, security, safety, and startup compliance and all the rest are very relevant to the drone dominance.
• 10:10
  SPEAKER_00: So we started the discussion by the fact that we are very focused on group one, group two, and FPV drones are beneath that.
• 10:18
  SPEAKER_00: But the changes recently that happened regulatory-wise and their requirements made that mobilicom is one of the best candidates to provide the ecosystem with a solution to meet the new requirements of the hardware, communication, and other pieces, electronic welfare, and the new requirements for the cybersecurity.
• 10:38
  SPEAKER_00: I was can tell you that I'm amazed that I'm meeting with some of the CEOs of those companies, and few of them understand that they have such cyber requirements that will kick in in phase three, phase four, which is 2027.
• 10:52
  SPEAKER_00: So being very uh in um in depth into the details of the program and requirements and office uh roadmap, I think that it becomes uh it's going towards solutions like mobilicom and definitely in the cybersecurity data links and electronic welfare.
• 11:10
  SPEAKER_00: So it's put us very much into the game, and that's exciting.
• 11:15
  SPEAKER_00: Excellent.
• 11:16
  SPEAKER_02: So speaking of the different offices, uh, I believe Mobilicom recently was included in the uh Marine Corps program of record.
• 11:24
  SPEAKER_02: Also, you recently announced a partner in Lasso, I think that's the US Army's uh program.
• 11:29
  SPEAKER_02: So the question really becomes how do you leverage these tier one relationships and your current one you know backlog to really multi-year production revenue?
• 11:44
  SPEAKER_00: I think that uh chasing the vendors or working with the OEMs, the tier one OEMs in America, that are have the best chances to win the programs of record, which is the Holy Grail.
• 11:56
  SPEAKER_00: This is the biggest program of procurement that company can wish for because it's promised specific budget allocated for five to ten years with additional extensions and repairs and maintenance and so forth.
• 12:11
  SPEAKER_00: So everybody understands that that's where each company wants to get that because that guaranteed go forward-looking business for many years.
• 12:18
  SPEAKER_00: And we worked with uh uh one of the top three or top two in the United States tier ones on that field, and we are proud that our systems we currently have about 2,000 already fielded with OPFL and uh SOCOM and some of the army in the different testing, and from the program of record win of our partner from January, there is uh hundreds of systems being deployed every uh month or two.
• 12:46
  SPEAKER_00: I mean, it's it's constant deployment all the time, uh, and that increased the footprint of mobilicom in the United States.
• 12:54
  SPEAKER_00: On the back of that, the new program of record put us again uh uh with our partners as contributors and leaders.
• 13:01
  SPEAKER_00: We changed the environment around mobilicom because we have three critical pillars.
• 13:07
  SPEAKER_00: We have all the regulations, standardization uh that we have to pass in order to be valid for American drones or Department of War drones, which is great endorsement and credibility.
• 13:21
  SPEAKER_00: We have the program of record and uh capability that winning and being on program of record gives you different league by itself.
• 13:28
  SPEAKER_00: And we have uh partnerships and ecosystem that we created, new drone manufacturers, group one, group two in America right now.
• 13:38
  SPEAKER_00: Approach Mobilicom, work with Mobilicom, and increase, I mean, integrate with Mobilicom right now, because we are a valid provider and that was uh endorsed and and proven itself on the biggest uh programs, which open the door for market share increase, which is what we are doing right now.
• 13:56
  SPEAKER_00: And we are translating that into volume, is I think that the market it will take time for the market to adjust from winning programs to deploying programs and mass scale those.
• 14:11
  SPEAKER_00: Part of our initiative to increase our footprint of production in the United States and have uh higher uh capabilities on US soil production in high volume uh by end of this year is to meet the demand of the of the Pentagon and to answer new requirements.
• 14:30
  SPEAKER_00: You mentioned the drone dominance program and others, and new customers that are approaching us.
• 14:35
  SPEAKER_00: So that's how we intend to scale that, leveraging our footprint and pillars of success to a high um winning additional designs of new tier ones, tier twos, which we are doing, and providing all the scalability to able to enjoy that and translate the winning into volume and value within of revenue.
• 14:57
  SPEAKER_00: And this is what it's done.
• 14:58
  SPEAKER_00: And and I think that by end of 2026, we will again revamp our situation, will be much better with more players, more programs, and local production for high scalability that can meet the needs of those high-volume programs.
• 15:17
  SPEAKER_02: Excellent.
• 15:18
  SPEAKER_02: Now, you you were mentioning before you have a significant amount of software, and your corporate strategy, obviously, with 90% plus gross margins on software, is looking into that pretty hard.
• 15:30
  SPEAKER_02: Um, so really, how does the software first approach really maintain that margin profile and accelerate your timeline to becoming cash flow positive?
• 15:44
  SPEAKER_00: I think it goes down to one parameter which uh is critical to investors, which is called the ROIC, the return on um invested capital.
• 15:56
  SPEAKER_00: Okay, why it's important because investors would like to understand if a company is how what is the gross margin of their business, how intensive is their investment uh should be made in order to scale to higher volumes, and how you translate the top line to the bottom line from the revenue to the profit.
• 16:18
  SPEAKER_00: And let's discuss that uh with mobilicon because I don't believe that you will find a most interesting more interesting ticker than mobilicon with that capabilities.
• 16:28
  SPEAKER_00: So, first, if you have software and cyber, which are going to take higher and higher percentage as we move forward, so 2027 it will be higher.
• 16:39
  SPEAKER_00: Uh the percentage of software will be higher and cyber will be higher.
• 16:43
  SPEAKER_00: 28 and so on.
• 16:44
  SPEAKER_00: So we intend to have higher value and volume or percentage of our sales in this licensing software or cyber, which means that instead of being 50 to 60 percent gross margin, the company overall gross margin will have a better mix of the 90 percent.
• 17:01
  SPEAKER_00: So we will grow that.
• 17:03
  SPEAKER_00: And and if you're having a company with 70, 75, 80 percent gross margin, it's a phenomenal tool of uh profitability and growth.
• 17:12
  SPEAKER_00: Second, we are very, very um, let's say, efficient company in our structure, uh, and therefore we are consuming very low um uh burn rate, which means that in a cash flow uh we can get cash flow positive with about 12 million dollars with the current company structure.
• 17:33
  SPEAKER_00: So that means that once we are getting there, which could be in in a few quarters, um uh we believe that our capability to scale and move from one time one time production we have to now to 10 times production and capacity will be in very low investment because we are using contract manufacturers.
• 17:54
  SPEAKER_00: We own the IP, we own the drawing, we know, we know own the software.
• 17:59
  SPEAKER_00: We like we provide contract manufacturers company, we hire them to produce it for us.
• 18:04
  SPEAKER_00: We then take that and we encapsulate our software and IP inside, make it as smart, harder it is, and therefore we can scale faster by contract.
• 18:13
  SPEAKER_00: I don't have to build the factory place and and I don't have to buy the machinery, I don't have to put a lot of employees, training, test sites, and so on.
• 18:22
  SPEAKER_00: That is very relevant to drone companies that you see on the Nasdaq or other intensive work and labor uh hardware businesses.
• 18:33
  SPEAKER_00: So we can do 10 times production with very minimal management in investment on the process, and that's unique.
• 18:41
  SPEAKER_00: So we can scale, so we have high gross gross margin, high capability of scalability with low investment, which means that in RIC uh we are very, very interesting company, and then once we catch a positive, most of the top line is translated to the bottom line, and that's unique.
• 19:01
  SPEAKER_00: That's really unique because if you have 70, 75, 80 percent gross margin with minimal scalability cost, really, really small, then the entire top line is translated to the bottom line, and then you create an engine company that can grow very fast.
• 19:18
  SPEAKER_00: And if you are looking on companies like Palantir and the rest, you understand that.
• 19:22
  SPEAKER_00: And that's mobilicon.
• 19:24
  SPEAKER_00: And we early in the game understood that we want to be more than one stop, one stop provider, and I will discuss that if you allow me later.
• 19:34
  SPEAKER_00: And um the software mix and cyber mix are the elements that will stay.
• 19:39
  SPEAKER_00: If you look on any revolution worldwide, any revolution um of every generation that we've seen of different revolutions, hardware was the beginning.
• 19:49
  SPEAKER_00: Hardware had a lot of pressure points on pricing as they scale, but the winners for long term were the operating systems, cyber software uh providers that continue to win and grow.
• 20:03
  SPEAKER_00: And that's why Mobilicom over the years have the foot in the door with the hardware, which is essential, give us the footprint and the real estate to then burn our cyber and software on board that will be the revenue maker, the profit maker, and will last for long term.
• 20:23
  SPEAKER_02: Right now, so you've got the hardware and the software, and obviously over time, hardware, unless it really is unique, does tend to get their margin squeezed.
• 20:32
  SPEAKER_02: One of the other things, though, is that the FCC has granted you trusted drone status.
• 20:37
  SPEAKER_02: So is that something else?
• 20:39
  SPEAKER_02: I think it's only three other companies that have that.
• 20:42
  SPEAKER_02: Um, how is that unique to you, or not not unique, but you know, an advantage to you from a selling and a winning perspective, a winning deals.
• 20:53
  SPEAKER_00: And when you are discussing with different vendors, it's all about who you believe that will help the OEMs uh scale their business, win their business.
• 21:01
  SPEAKER_00: You spoke about the depart the drone dominance.
• 21:04
  SPEAKER_00: Uh, I will tell you one thing is there is a from the first round of drone dominance, there were 11 companies that got to the finalist.
• 21:12
  SPEAKER_00: If I recall right, from information that I got, only four eventually got the contracts.
• 21:17
  SPEAKER_00: 11 were supposed to get the contracts for scalability, only four, because the others fail on NDAA, fail on the cyber testing, fail on scalability on United States production.
• 21:29
  SPEAKER_00: So they got to the gate and they couldn't enter the mass production program because of those things.
• 21:36
  SPEAKER_00: If you're working with a partner that has all of those, that improve your chances of winning.
• 21:41
  SPEAKER_00: So I encourage every OEM within the United States that produce drones or outside that target the American programs to carefully understand their strategy, understand that they will eventually, it doesn't help you to get to phase one, phase two of the program if you cannot win and sign the third.
• 22:00
  SPEAKER_00: 30,000, 50,000 units of the mass market and scale.
• 22:04
  SPEAKER_00: Otherwise, it doesn't matter.
• 22:06
  SPEAKER_00: So you have to choose your partners, do your strategy, do your learning, and understand who can help you with that.
• 22:12
  SPEAKER_00: Second, I think that's an important uh factor, and those that have this trusted cyber that you mentioned is another proof point of credibility, of uh recommendation and endorsement.
• 22:28
  SPEAKER_00: What it says on the Department of War letter and the FCC letter that issued to the public is that with the new regulation that was published this year, of the we don't just want regulatory procedures to validate solution.
• 22:43
  SPEAKER_00: We want local production and we want American solution in the critical elements.
• 22:48
  SPEAKER_00: And then they define mobilicom.
• 22:51
  SPEAKER_00: Back then we were one of the uh first four, only four that received back then the early uh the endorsement.
• 22:58
  SPEAKER_00: And all our products, including the cyber, the electronic welfare software, and so on, were in the list of recommended endorses and defined as critical technology provider for America.
• 23:11
  SPEAKER_00: So it's yet again another stamp, another badge, another medal that shows that mobilicom is in the right place at the right time, and you want to partner with mobilicom to make your smoother approach to win and scale your business as a drone manufacturer.
• 23:25
  SPEAKER_00: This is my message, and I think that those partners uh have to understand that if they are doing their homework, and that's why we are repeating that.
• 23:33
  SPEAKER_00: And we carefully tell them choose your partners, choose your partners that will be able to scale with you.
• 23:38
  SPEAKER_02: You were speaking about local production.
• 23:40
  SPEAKER_02: I mean, obviously you'd like to sell a lot of software, but you still need to have the hardware to go ahead and support that.
• 23:46
  SPEAKER_02: I believe you discussed building strategic inventory and establishing U.S.
• 23:51
  SPEAKER_02: manufacturing footprint.
• 23:52
  SPEAKER_02: So, can you give us a little more color on that strategy and where you are with that progress?
• 23:59
  SPEAKER_00: I believe that there are two teams.
• 24:00
  SPEAKER_00: I mean, having a US production to meet the regulation of the Pentagon, able to scale production in America independently, is critical, I think, to win the programs, especially drone dominance and the others are alluding to that, but also program of records say, okay, if you want to win the business, you have to make it here.
• 24:18
  SPEAKER_00: And that's clear.
• 24:19
  SPEAKER_00: And uh, and I don't think that anyone else right now, I mean, don't start a business or planet drone if you don't choose the partners that can give you that from day one.
• 24:28
  SPEAKER_00: You are just adding risk to your capability.
• 24:32
  SPEAKER_00: So choosing mobilicom is a smart move because you have all the endorsement, production, and so on.
• 24:39
  SPEAKER_00: On the other factor, uh, and that's the other than production and local production scalability, is the let's say supply chain.
• 24:49
  SPEAKER_00: Supply chain becomes the critical factor right now.
• 24:53
  SPEAKER_00: We all remember that we had the COVID and there was a spike in demand of uh home uh appliances and electronics, and then we couldn't meet that, and cars production couldn't meet that, and so on, because of different reasons.
• 25:08
  SPEAKER_00: I can share with you that according to our internal analysis, okay, um every few few months getting a new update presentation from a COO on the on the house Latims, the problem is going to be bigger, wider, and for longer term than what we experience in the COVID.
• 25:26
  SPEAKER_00: Again, a big, big um uh issue is go is right now piling up on supply chain of electronics.
• 25:35
  SPEAKER_00: There are three elements that contribute to that.
• 25:38
  SPEAKER_00: One is all the AI revolution and production needs for uh AI um you know um uh sites and and and so forth already occupy and took the demand for some of the components for five years forward and committed all the production line of some companies.
• 25:55
  SPEAKER_00: So you cannot get some of the memories or some of the things because they are fully committed.
• 25:59
  SPEAKER_00: So the the other company uh manufacturers that have their production, they have to now decide who they are selling to and how long it will take each one to get that.
• 26:10
  SPEAKER_00: That's one revolution that really eliminates and a increase the prices, b change the lead time.
• 26:17
  SPEAKER_00: Second, we all understand that the conflicts in the world created a um a situation what all the budgets are that are fueling the defense market are jumping five times in many countries, which means that we have an arm race, which means that arm race is dependent on electronics.
• 26:37
  SPEAKER_00: So the demand of electronics is skyrocketing on that, which is adding additional demand to the market, okay, which amplified the uh amplifies the problem of uh again prices and lead time to get the components.
• 26:51
  SPEAKER_00: And the third thing is the conflict in the Middle East.
• 26:54
  SPEAKER_00: Uh some of the rare materials that you want to have to produce PCBs or other elements are are not uh are in um uh limited right now, and therefore logistically and bringing some of the materials and some of those issues of logistical delivery again increase the price, increase the lead time.
• 27:12
  SPEAKER_00: So those three pillars contribute to amazing uh uh uh evolving issue that I anticipate will stay for many years because the arm race, the AI race, and so on continue.
• 27:25
  SPEAKER_00: Okay, they will not stop tomorrow, it's not one thing or one hiccup.
• 27:29
  SPEAKER_00: Therefore, those that build um the inventory that will enable them to deliver faster are ones that will be able to win on the back of the others.
• 27:42
  SPEAKER_00: So we bought a lot of uh materials, we intend to increase that uh with the work with the tier ones and uh and our customers in order to be prepared to their delivery.
• 27:55
  SPEAKER_00: Um, and then uh the fact that we have cash in hand and we're able to react and build that, that's an advantage from Wilicon because as this event will scale, right now, for example, I give you one example PCB materials.
• 28:11
  SPEAKER_00: If you send that in in to produce production in Asia or in the Middle East or in Europe, it was 30 days, four weeks.
• 28:20
  SPEAKER_00: Now they move to 120 days, and it's not it's just the start.
• 28:27
  SPEAKER_00: So uh one, there will be a problem for America to produce what America wants in order to close the gap against advisory.
• 28:34
  SPEAKER_00: Second, if someone in the drone manufacturer business wants to commit that, they have to lock their business very fast, or if the competitors that we have unable to deliver, we can then deliver uh and take that mark market share.
• 28:48
  SPEAKER_00: So I'm taking this challenge and trying to convert it on my behalf to an opportunity to win more market share on the back of that.
• 28:59
  SPEAKER_02: So maybe one final question for me.
• 29:01
  SPEAKER_02: Um, moving beyond the US for just a minute.
• 29:05
  SPEAKER_02: I mean, certainly that's the largest strategic market for you.
• 29:09
  SPEAKER_02: Where internationally are you also seeing signals of strong demand and where might that lead?
• 29:15
  SPEAKER_02: Just curious.
• 29:17
  SPEAKER_00: So obviously, um, Israel is an important market, not because Israel is a big consumer, it is, but it's not the key because the companies in Israel are in the front front of cybersecurity drones.
• 29:31
  SPEAKER_00: So uh a lot of that technology is going from Israel to uh the world.
• 29:36
  SPEAKER_00: So if you work with the vendors in Israel and the OEMs, you could be implemented across the European market and India and other places where Israel is very strong, including sales to America.
• 29:49
  SPEAKER_00: So that's a more important market.
• 29:51
  SPEAKER_00: Uh, the second uh and in in the same level we see the European market because the shift of NATO countries from 1% GDP to 5% GDP on defense, guarantee budgets for the next seven years, arm race that is continuing uh and and scaling, and drones or robotics being the first uh one of the first investments to be made.
• 30:15
  SPEAKER_00: So obviously, you have to do that, and then they want to have their own solutions over there, the own production over there, and therefore our flexibility, for example, uh allow us um because we are multinational entity, the American, the Australian, the Israeli, the fact that we can um establish production very easily in other locations, give us opportunity to enjoy those fruits and the leverage that on our behalf.
• 30:44
  SPEAKER_00: So those are the key markets.
• 30:45
  SPEAKER_00: We do have partners and customers in the UAE, which right now have uh one of the biggest uh uh aerospace companies and defense companies that is growing.
• 30:57
  SPEAKER_00: And obviously, in this region right now it will have a ripple effect of investment in that field.
• 31:02
  SPEAKER_00: So we we believe that uh this the things that we've done there with the government and the things that we've done there with the manufacturers is important.
• 31:10
  SPEAKER_00: Uh Singapore, we have the biggest Singaporean company selling to Asia Pacific, ST Engineering, which is our partner and customer for the ground robotics.
• 31:21
  SPEAKER_00: Uh, we've done all the certification and regulation for the defense and commercial in Japan.
• 31:25
  SPEAKER_00: So Japan is an interesting market.
• 31:28
  SPEAKER_00: Uh and so those are scattered some opportunities, India.
• 31:33
  SPEAKER_00: So, but we are carefully choosing that.
• 31:35
  SPEAKER_00: But America first, Europe in Israel, and then some of those countries that we already sold to and have the certification for.
• 31:42
  SPEAKER_00: Excellent, Oren.
• 31:44
  SPEAKER_00: Thank you so much.
• 31:44
  SPEAKER_00: Over to you, Tim.
• 31:46
  SPEAKER_01: Thank you, John.
• 31:47
  SPEAKER_01: Uh, Oren, thanks for uh meeting with us today to discuss mobilicom.
• 31:50
  SPEAKER_01: It feels like you're in the right place at the right time and uh you know a very, very hot industry.
• 31:54
  SPEAKER_01: So thank you so much for all the detail.
• 31:57
  SPEAKER_01: Thank you very much.
• 32:01
  SPEAKER_01: Thank you for listening, and don't forget to subscribe, as well as visiting www.watertowerresearch.com to stay up to speed on the company's small cap written research reports, podcasts, fireside chats, industry specific symposiums, and conference schedules.
• 32:17
  SPEAKER_01: We will see you next time for another edition of the WTR Small Cap Spotlight Podcast.
• 32:22
  SPEAKER_01: Finally, a special thanks to the producer and editor of the podcast, Krista Fitzpatrick.