First Breach (NASDAQ:FBDT) outlined plans to expand its ammunition manufacturing and enter the small-drone market, positioning its Maryland production facility and domestic supply chain as central to its strategy.
Speaking at an investor event, Chief Revenue Officer Ken Leith said the Hagerstown, Maryland-based defense technology company manufactures ammunition, ammunition components, drones and drone components for law enforcement, military and industrial customers. He described First Breach as a vertically integrated manufacturer focused on small-arms ammunition and Group 1 unmanned aerial systems, the smallest category of drones.
Ammunition Production and Capacity Expansion
Leith said First Breach currently produces match-grade ammunition, including 9 mm, .223 and 5.56 rounds. He said the company intends to expand its offerings into 7.62×39 and other specialty stock-keeping units, while maintaining its focus on high-volume, widely used calibers.
The company’s manufacturing facility comprises more than 300,000 square feet, according to Leith. About 80,000 square feet is currently used for ammunition operations, while another 216,000 square feet is intended for drone manufacturing expansion. He said the site, formerly associated with production of the A-10 Warthog aircraft, has heavy-duty concrete flooring, high ceilings and electrical infrastructure intended to support precision manufacturing.
Leith said First Breach has increased ammunition operations from eight-hour shifts five days a week to 12-hour shifts seven days a week, and plans to move toward 24-hour, seven-day production. He attributed demand for 9 mm and 5.56 ammunition to reduced availability of Russian ammunition in the U.S. market and NATO countries’ need to replenish inventories following the Russia-Ukraine war.
During a question-and-answer session, Leith said propellants are no longer the primary supply-chain constraint for small-arms ammunition, identifying primers as a more significant issue for the industry. He said First Breach has strong powder supply relationships and does not view propellants as a constraint for its small-arms business.
Group 1 Drone Strategy
First Breach is also developing Group 1 drones, including attritable systems, mid-range interceptors and counter-unmanned aircraft systems. Leith described attritable drones as systems designed for one-way missions, including drones that strike targets kinetically or carry energetic payloads.
The company’s drone designs include dual front-facing cameras intended to provide stereoscopic capabilities for simultaneous localization and mapping, or SLAM, in environments where GPS or communications may be disrupted. Leith said the systems could also incorporate FLIR, infrared and lidar capabilities for surveillance, targeting and navigation applications.
Leith said First Breach is developing common delivery systems and electronic safety and arming devices, or ESADs, that can support remotely released payloads. He said the company sees potential for drones to be delivered in quantity from larger “mothership” aircraft or helicopter platforms.
The company is using a soft robotic arm with six degrees of freedom in its manufacturing designs, according to Leith. He said the arm can assemble more than 45% of the drone device and is intended to support scalability and lower production costs. First Breach works with Hellbender, a Pittsburgh-based engineering design partner that Leith said is also involved in chip manufacturing for the company’s drones.
Domestic Supply Chain and Certification Efforts
Leith said First Breach aims to keep its supply chain in the United States, citing resilience against geopolitical disruptions rather than export-control considerations. He said export licenses through the Directorate of Defense Trade Controls are required for drone shipments to foreign countries, but added that the company expects its customer mix to focus on domestic U.S. and NATO markets.
The company is pursuing Blue UAS certification for its drone products and components, Leith said. Hellbender has applied for certification covering its chips and engineering components, while First Breach is working to have its drone components and manufacturing processes certified. He said the company currently has exceptions under the Drone Dominance program while it completes the process.
Addressing electronic warfare risks, Leith said drone resilience depends on radio-system capabilities and software. He cited mesh hopping as one method used to counter signal disruption and said First Breach is emphasizing edge computing, in which onboard processing can continue operating if communications are denied.
Leith said First Breach expects to pursue both organic and inorganic growth following its August direct public offering.
About First Breach (NASDAQ:FBDT)
First Breach Inc is a defense technologies company of match-grade ammunition components, finished ammunition and next-generation unmanned aerial systems for commercial, law enforcement and military markets. The Company manufactures its products in-house where it produces brass cups, casings, projectiles, lead cores, lead wire and completed ammunition with rigorous quality control standards. First Breach Inc is based in HAGERSTOWN, MD.
