Andrew

Laser threats are the new hyper-expensive problem on the battlefield. The Iran war made that very clear. Cheap ~$750 drones are kamikazeing $1.5M-$4.5M tanks and destroying them. Meaning drone-to-target cost ratio can be thousands-to-one. No army can afford to dump tens of millions of dollars on expensive tanks, to have them be taken out by a couple cheap thousand dollar drones. During the Iranian war, we've seen that drones are not just a threat to expensive war machinery, but also: - civilian buildings - power infrastructure - command HQ's - oil and maritime infrastructure This problem is not hopeless though, if we can detect the laser targeting by these drones before they blow something up, we can neutralize the drone, or pop smoke (clouding visibility). Some companies are ramping their laser threat detection solutions to solve the problem: - Hensoldt $10B mc - Elbit $37B mc / $ESLT - Northrop $80B mc / $NOC - Defsec Tech $6M mc / $DFSC But there's a problem with most of these: they're expensive. Each laser threat detection kit costing militaries upwards of ~ $200,000 per kit, with DEFSEC being the exception here. DEFSEC has designed their laser threat detection system, BLISS, to be low-cost, fully consumable, and maintenance-free, making them optimal for mass deployment. Militaries can now blanket the battlespace, or civilian area, with laser threat detection using DEFSEC's BLISS product, giving them ample time to respond to drone threats, before it costs them millions of dollars, and soldiers lives. Ok, so DEFSEC's solution is likely better than most primes. But it can take years for them to see traction as a company, right? Why now? - David Ibbetson joined the board last month, former vice president of General Dynamics Mission Systems (GDMS) for 25 years. - Elisabeth Preston made CLO three months ago, was Chief Legal Counsel and VP of International Compliance for GDMS International. - Harry Webster made COO, was a project manager for GDMS for 8 years. Multiple high-caliber figures have migrated from a $90 billion company to this tiny $6 million company in quick succession. This solution from DEFSEC is arguably much more effective than the one from primes as well. By blanketing a battlefield or civilian area with laser threat detection, the military receives a Google Maps like interactive visual that allows them to counter these threats in ample time. By simply putting one expensive laser detection system on a tank, you don't get enough information and may not be able to respond in time. With the folks listed above understanding this, that may be why they joined DEFSEC, to help bring BLISS to market through connections and experience. The story isn't without problems though, $DFSC is a serial diluter. But, there's a couple signs converging that make us believe they are either slowing dilution, or completely done diluting. DEFSEC’s current business is being supported by a practical, ramping revenue engine: its software-services work under DSEF and Land C4ISR, two Canadian Army digitization programs. These two contracts have a $75M ceiling and give DEFSEC recurring revenue while the company works to commercialize higher-upside products like BLISS. The ramp has already shown up in the numbers. In FY2025, $DFSC reported revenue up 229%, from CAD $1.5M to CAD $4.9M, driven largely by growth in its digitization business (DSEF + Land C4ISR). Management then guided that government-program billings would reach approximately CAD $8.8M annualized as of Feb 2026. Then, in its Q1 FY2026 update, annualized program billings reached around CAD $9.0M, with near-term growth potential toward roughly CAD $9.9M, continuing the ramp up. These programs are set to complete in 29' and 33' (our estimate), providing DEFSEC a ramping, reliable revenue floor for the next 3-7 years. There is a lot more to this story that I'll be sharing soon in a free Substack article, stay tuned. Full disclosure, I have a position in DFSC at the time of this post, and this is not financial advice.

Something just came across my desk. This kid isn’t allowed to cut his hair until Manchester United wins 5 games in a row. It’s been 493 days. Man U is on a 4 game win streak and plays today. I’m riding with him. Man U ML -135 is a mortal mega max.

Not as much for me today, but I took a flier on this 6-legger for some action