Author’s note: I hold a long position in Applied Energetics (AERG). The views expressed here are entirely my own and were developed through independent research, including conversations with management, third-party scientists, defense industry experts, and reviews of public filings and disclosures. This is not investment advice.In April I wrote that the drone-killer frame was too small. I still think that, and this piece doesn’t relitigate it.This one is simpler. On February 12, Chris Donaghey went on a public webinar and told investors exactly what 2026 would produce. He named the deliverables. He named the timing. He defined what success looks like.He set the scoreboard.It’s August. Four months left. Let’s look at the board.What he put on itHe called them the three Ps.Product. Move from a laser demonstrator to a complete prototype PLAID product — laser, beam director, and software together — at TRL7 or higher, defeating targets at tactically relevant range.Program. Convert the business development pipeline into active contracts and start generating revenue. Asked directly whether that meant within the year, he said yes.Partner. Get teaming agreements across the finish line with primes. Move contract manufacturer conversations from talk to hardware.And then the three Ts and three Ds: test, test, test; demo, demo, demo. Bringing customers to the range for live fire, then taking the system out to military exercises.Where it standsComplete prototypes — TRL7+ by year-end. – Not yet.Active contracts, revenue within the year. – STRATFI selection. Rochester follow-on. No production contract.Teaming agreements with primes. – Nothing announced.Disable moving targets at tactical range – Indoor battle lab demo coming soon. Outdoor to soon follow.Range: “beyond one kilometer”. – Not yet.Nothing on that list is unreasonable. And nothing is finished.The two things that did happen(1) STRATFI, on August 18. Selected for up to $8 million in funding.The dollars aren’t the signal. Eight million over two years, paid against milestones, is great, but it’s not a financing event.The sponsor – the Air National Guard – is the signal. Matched funds come from the customer’s own appropriated funds, and the Guard’s job is installation defense — airfields, armories, fixed sites. An operational user with base-defense responsibility put its own money behind this.The December outdoor test put them at TRL5. Donaghey called that the inflection point, because TRL5 is what unlocks the roughly $150 billion the Pentagon spends moving technologies from TRL5 to TRL9. STRATFI is the first draw on it.(2) Directed energy got its first program of record — to AeroVironment. The Army is negotiating for the Enduring High Energy Laser: 24 systems, 30kW, Group 1–3 drones, close to $25 million apiece.Key takeaways: (1) the DoW will actually buy directed energy, which after DE M-SHORAD and Valkyrie was an open question; and (2) directed energy now has a price — $25 million for 30kW of thermal hard kill, against PLAID’s target of $1.0 to $1.5 million.E-HEL’s own engagement times run to several seconds. Against a fast-closing swarm, that’s the whole problem in one number.Moreover, the market appears to be splitting by target class. Class 1 and 2 drones and swarms are an engagement-rate problem. Shahed-class targets are a dwell problem. Those aren’t substitutable missions, which is why AERG’s path should run through the primes rather than against them.The Calendar – What’s leftWhat kills programs in this field isn’t physics. It’s engineering.The 50kW DE M-SHORAD was dropped after field results were very different from the range. The 300kW Valkyrie never transitioned. But the DoW is clearly leaning in. What’s left is turning prototypes into things soldiers can operate.So here’s the rest of the board, ordered by distance from the battle lab.1. Indoor beam quality — weeks. Table stakes. I expect it to pass and a pass proves little. A stumble will not be good.2. Backpack, tested and specified — weeks. I’ll ask about four numbers: range, effect, weight, power draw. And was it company-run or customer-witnessed.3. Outdoor, at range, in real air — weeks to months. This is where DE M-SHORAD died. I don’t want footage. Rather I’ll ask about conditions — measured range, weather, target type, whether it moved, whether the effect was verified or inferred. Note the company’s own March outdoor demo published everything except the range.4. Flying targets past a kilometer — this year. A stationary target at 1,200 meters and a maneuvering quadcopter at 1,200 meters are very different demonstrations.5. The kill chain, not the laser. Several drones in under a second is the laser, and I believe it. Detect, track, find the aperture, point, engage, verify, transition — that’s fire control. Different problem.6. Laser, beam director and software integrated. Donaghey has said the company won’t build the beam director, and that it only began staffing beam director and software work this year. Ruggedization is a finishing problem. Integration is the majority of a weapon system.And ultimately, the one that matters: an order for five units.Donaghey described the sequence exactly. The first production order is five units, so the customer can put them through their paces operationally. Then fifteen. Then twenty-five. Then fifty.Five units is roughly six million dollars. It will read like a nothing headline. It’s the most important event available to this company … by far, because it’s the moment the story stops being a story.Management hasn’t blinkedHere’s the part I keep coming back to. In February Donaghey had eleven months and every reason to hedge. He didn’t. Contracts within the year? Yes. Range past a kilometer? We’ll get there. A backpack prototype? Yes. A PLAID prototype? Yes.It’s August. Four months left. He’s repeated the same commitments at Roth, Morgan Stanley, Craig-Hallum and, most recently, Needham — where he said they were still on plan. He’s not looking for an exit. Which means gates must begin falling quickly. By December, we’ll know.The clockCash was $1.1 million on June 30, with roughly $2 million raised since so far, in a market where investors are actively looking for exposure to counter drone. The burn implied by the filings: $4.1 million at March 31 to $1.1 million at June 30. Close to a million a month.At that rate, $3.1 million is about three months. End of September. October if spending slows. I’m told the prototype parts have already been purchased.The company has wealthy, committed backers who have funded it through a decade. The $5 million FY26 line item for ultrashort pulse laser development is real. STRATFI money is coming. The Office of Strategic Capital exists for exactly this profile. Both institutional finance and strategics have been very active in this space, and I think AERG is a terrific candidate.The money probably comes. What it costs depends on whether the demos land first. A raise on the back of a working system is a strategic investment on the company’s terms. A raise with the scoreboard still empty may cost a bit more.If they clear itIn February, Donaghey laid out the math: 2,000 units across the 20 most critical strategic bases and forward operating bases overseas, at $1 to $1.5 million each. Roughly $2 billion of production revenue, plus a couple of billion more in sustainment over the life of the system.A $4 billion program, for counter-drone alone, at a company worth $280 million today.Discount it however you want for time and odds. It isn’t close.And that’s only one program — before the backpack, before integration onto CW platforms, before allied sales, before Rochester and hypersonic, before space.Four months leftIndoor beam quality; a fielded backpack unit; a fielded PLAID unit; flying targets past a kilometer.It’s a lot to get done, and that’s exactly why I’m writing this now.The technology has been early for a decade. It isn’t early anymore. The Department has said it will buy directed energy in the past; it’s proven that it’s buying directed energy today. The threat is killing people now.I own the stock, because I think more points will go on the board this year. That’s my judgment, not a recommendation.They set the scoreboard in February. December is four months out.It’s time for the ball to go in the hoop.David’s Investment Notes is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.