Key points
- The Office of Strategic Capital committed up to $820 million to Performance Drone Works on July 31, the largest OSC loan commitment announced so far.
- OSC director David A. Lorch said PDW is one of "several" domestic component producers that will receive loan commitments.
- PDW is private. Ondas (ONDS) holds $35M of its preferred stock, under 1% of Ondas' own market cap, with no significant influence per its 10-Q.
- Energy Fuels (UUUU) gapped up 17% on its OSC loan June 18 and closed below its pre-announcement price one week later.
The Department of War's Office of Strategic Capital announced a conditional loan commitment of up to $820 million to Performance Drone Works on Friday, July 31. The money is for high-volume domestic manufacturing of drone components.
The release says the plant will "supply components to multiple manufacturers and platforms," not just PDW's own. Those components go into Group 1 and Group 2 unmanned aircraft, the two smallest classes the military flies.
David A. Lorch, director of OSC and senior advisor to Deputy Secretary of War Steve Feinberg, said this one isn't the last. "PDW will be one of several domestic component producers receiving OSC loan commitments in support of President Trump's Executive Order 14307, 'Unleashing American Drone Dominance,'" Lorch said. Expanding that production, he said, "will benefit manufacturers throughout the ecosystem and improve supply-chain resilience."
What the Office of Strategic Capital is
OSC is the Pentagon's lending arm. It makes loans to companies the government considers critical to national security supply chains, rather than buying their products. It was created under the Biden administration and it's kept growing under the current one.
The office had under $1.5 billion allotted for fiscal 2026. The Pentagon has asked for more than $20 billion for the program in fiscal 2027, DefenseScoop reported in April.
Its commitments so far:
| Recipient | OSC commitment | Date | Sector |
|---|---|---|---|
| Performance Drone Works | $820 million | July 31, 2026 | Drone components |
| Energy Fuels (UUUU) | $725 million | June 18, 2026 | Rare earth processing |
| Vulcan Elements | $620 million | November 2025 | Rare earth magnets |
| Phoenix Tailings | $500 million | June 16, 2026 | Rare earth processing |
| ReElement Technologies | $80 million | November 2025 | Critical mineral refining |
The Vulcan Elements and ReElement loans are two halves of one $1.4 billion rare earth magnet partnership, not separate deals.
Rare earths have been the theme until now. On the Energy Fuels loan in June, Lorch said OSC was "deeply focused on supporting domestic processing for critical minerals and rare earths." The PDW commitment is the office's first big move into drone parts.
$820 million is the largest one yet
It tops the $725 million OSC committed to Energy Fuels in June. It also tops the $620 million loan to Vulcan Elements, which was called a record for the office when it was signed in November.
It isn't money out the door. PDW still has to satisfy "financial, legal, technical, and other due diligence requirements" before the deal reaches financial close.
Performance Drone Works is private
PDW is based in Huntsville, Alabama, and was founded in 2019 by Patrick Laney, Ryan Gury and Trevor Smith. It builds the C100 quadcopter, a strike drone and mission planning software for the military and federal agencies. It bought Vanteon in June.
Its $110 million Series B was announced in March and led by Ondas (ONDS). Hood River, Cedar Pine, Hanwha Asset Management's venture fund and Booz Allen Hamilton also took part. Houlihan Lokey advised PDW on the round.
There's no way to buy PDW directly.
What Ondas actually owns
Ondas closed Friday at $7.47, down 1.5 percent, on volume below its 30-day average. The release landed near the close.
Ondas bought $35.0 million of PDW Series B-3 preferred stock on November 20, 2025, according to its 10-Q for the quarter ended March 31, 2026. The filing carries it at cost under the measurement alternative, the treatment for stakes with no readily determinable fair value. It only gets remarked when there's an observable transaction in the same stock.
The filing is blunt about the rest. "The Company does not have significant influence over any of the long-term equity investees," it says. Ondas' rights in PDW are information rights and the ability to appoint a non-voting observer to PDW's board. It doesn't disclose an ownership percentage.
Ondas' market capitalization is about $4.94 billion. The $35 million position is under 1 percent of that, and it sits next to much larger deals, including the $875 million DZYNE acquisition announced in July.
What happened the last time OSC lent to a public company
Energy Fuels is the only recipient on that list that trades publicly. OSC announced its $725 million commitment on June 18.
- June 17 close: $15.30
- June 18: opened $17.92, closed $16.56 on 28.6 million shares, against about 6.7 million on each of the three prior sessions
- June 25 close: $14.42
By June 25, one week after the announcement, the stock traded below where it started.
The loans are drawing congressional scrutiny
Senators Elizabeth Warren, Richard Blumenthal and Andy Kim wrote to the Pentagon about the $620 million Vulcan Elements loan. Vulcan raised a $65 million private round last August that included 1789 Capital, the venture firm where Donald Trump Jr. is a partner. Warren and Representative Jason Crow sent a separate letter on federal contracts benefiting the Trump family.
CNN reported on July 20 that 10 federal contractors backed by 1789 Capital have been awarded more federal money in the first 18 months of this term than in the four years of the Biden administration.
1789 Capital isn't among PDW's disclosed investors.
Drone stocks haven't tracked federal drone spending closely this year. We wrote in July about the gap between government drone budgets and the sector's share prices, and the House passed a $1.15 trillion defense bill on July 22. Unusual Machines (UMAC), which makes drone motors in Orlando, closed Friday at $21.16. Red Cat (RCAT) closed at $7.54.
James R. Shanahan, a senior managing director at OSC, said the office is "squarely focused on identifying and addressing bottlenecks in critical supply chains, including drones and autonomous systems." The PDW plant, he said, "along with private capital crowded in alongside it, will support the construction of significant new manufacturing capacity to address vulnerabilities across the drone supply chain."
Emil Michael, Under Secretary of War for Research and Engineering, put it in industrial policy terms. "Achieving Secretary Hegseth's mandate for drone dominance requires a secure and resilient industrial base here at home," he said. OSC is strengthening that supply chain, he added, "to ensure American manufacturers can deliver the lethal capabilities that our warfighters need."
Sources
- U.S. Department of War, The Office of Strategic Capital Signs $820 Million Conditional Loan Commitment with Performance Drone Works, July 31, 2026
- U.S. Department of War, $725 Million Conditional Loan Commitment With Energy Fuels, Inc., June 18, 2026
- Ondas Inc., Form 10-Q for the quarter ended March 31, 2026, Note 7, Long-Term Equity Investments
- DefenseScoop, Pentagon requests more than $20B for strategic capital loan program in 2027, April 6, 2026
- CNN, Trump Jr.'s 1789 fund invests in companies that have scored billions in federal funding, July 20, 2026
Prices are Friday, July 31, 2026 closes. Nothing here is investment advice.
