Tech Company Acquires Leading Drone Software Provider

1. Unusual Machines Inc. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Unusual Machines Inc. and Red Cat Holdings. 
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
4. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

For additional disclosures, please click here.

* Disclosure for the quote from the Clive Maund article published on December 12, 2024

1. For the quoted article (published on December 12, 2024), the Company has paid Street Smart, an affiliate of Streetwise Reports, US$1,500.
2. Author Certification and Compensation: [Clive Maund of clivemaund.com] is being compensated as an independent contractor by Street Smart, an affiliate of Streetwise Reports, for writing the article quoted. Maund received his UK Technical Analysts’ Diploma in 1989.  The recommendations and opinions expressed in the article accurately reflect the personal, independent, and objective views of the author regarding any and all of the designated securities discussed. No part of the compensation received by the author was, is, or will be directly or indirectly related to the specific recommendations or views expressed

Clivemaund.com Disclosures

The quoted article represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks cannot be  only be construed as a recommendation or solicitation to buy and sell securities.

Unusual Machines Inc. (UMAC:NYSEAMERICAN) announced it has signed a binding agreement to acquire Aloft Technologies Inc., the leading FAA-approved provider of unmanned aerial system (UAS) services to enterprise, public safety, and government customers in an almost all-stock transaction valued at US$14.5 million.

Aloft Technologies is the leader in the drone fleet and airspace management sector, powering more than 70% of all FAA-approved Low Altitude Authorization and Notification Capability (LAANC) airspace authorizations in the United States, Unusual Machines said.

"With the transition away from China, we need to care as much about our drone data as we do our drone parts," Unusual Machines Chief Executive Officer Allan Evans said. "Aloft is the market leader and the answer to how we provide American software to complement our hardware."

Aloft has provided more than more than 1.6 million authorizations in total, with 400,000 authorizations provided in 2024, UMAC noted. It has leveraged the data collected through millions of safe flights and airspace interactions to launch Air Boss, its new real-time UAS air traffic management (UTM) software.

With the FAA forecasting more than 3 million drones in the airspace by 2028, outnumbering traditional aircraft more than 10-to-1, the coordination and integration of all aircraft is critical to national security and the national economy, Unusual Machines said.

"Air Boss is the culmination of their years of work in fleet and airspace management," Evans said. "It will unlock airspace collaboration between governments, business, and consumers in a way that could prevent the confusion of what happened in New Jersey from ever being an issue again."

When it comes to their components, more than 90% of consumer drones used by the U.S. military are made in China, according to Marc Andreessen. As such, the U.S. critically needs non-Chinese drone components that are National Defense Authorization Act (NDAA)-compliant. 

Transaction Details

The closing of the acquisition is contingent on Aloft obtaining stockholder approval, the delivery by Aloft of its audited financials acceptable to Unusual Machines, the receipt of certain third-party consents, and the holders of no more than 10% of Aloft common stock having asserted appraisal rights.

"Aloft's mission has always been to enable flight through better technology and data-driven insights," Aloft Chief Executive Officer and co-founder Jonathan Hegranes said. "Joining Unusual Machines will accelerate our ability to achieve this mission at a larger scale while continuing to prioritize cybersecurity and American-made software solutions."

The acquisition is expected to close in the coming months, with both companies working closely to ensure a seamless transition for customers and stakeholders, UMAC said in a release.

'Demand Exploding'

Headquartered in Florida, Unusual Machines manufactures and sells drone components for defense, commercial, and recreational use. It aims to become the go-to provider of these products for the U.S., thereby reducing its reliance on foreign supply chains.

The company owns two brands it acquired from partner Red Cat Holdings Inc. (RCAT:NASDAQ): Fat Shark, specializing in FPV ultra-low latency video goggles for drone pilots; and Rotor Riot, a direct-to-consumer online store for small, acrobatic FPV drones and equipment.

*In a December 12 report about Unusual Machines, Technical Analyst Maund wrote that its stock "put in a stellar performance since August" then "broke out in November into a spectacular rally," the latter likely being the first upleg in a major bull market. Since June, the stock rose eighteenfold.

The December announcement that Donald Trump Jr. joined the company's advisory board, Streetwise Reports noted, undoubtedly contributed. The businessman has said he favors bringing drone manufacturing jobs to the States.

After having a normal reaction back into "buying territory" in December, Maund noted, UMAC looked attractive again and appeared ready to move higher.

"Fundamentally, the company is in the right place at the right time as it is a drone company, and to put it mildly, this is a growth industry with demand exploding," in large part due to increasing global conflicts, he added.

The Catalyst: Crowded Skies

Based on 2023 data, the Federal Aviation Administration forecast some 1.8 million recreational drones flying in the U.S. in 2024, according to a report by Scientific American.

The agency forecast nearly 1 million commercial drones in operation this year. Also, the U.S. is home to as many as 11,000 military drones, the Department of Defense noted.

Drone demand continues to rise overall, driving industry growth both in the U.S. and globally, data show. In the U.S., for instance, between now and 2034, demand for autonomous drones is projected to expand at a 19.7% compound annual growth rate (CAGR), and demand for fixed-wing drones should see a 19.1% CAGR, according to Fact.MR.

A 16.9% CAGR is expected for drone sales in the U.S. during this same forecast period, climbing to US$31.3 billion, up from US$6.6 billion in 2024. High drone use for commercial and recreational purposes is driving growth. Commercial end uses include construction, agriculture, security, film and television, and surveillance.

The global military defense drone industry is also on a growth trajectory, reported Grand View Research. By 2030, this market's revenue is projected to double from where it is now, hitting US$88 billion from US$40.5 billion. During this forecast period, a 13.9% CAGR is expected. Last year, North America generated the most revenue in this sector.

Ownership and Share Structure

About 11.1% of the company is owned by management and insiders, UMAC said. The rest, 88.9%, is retail.

Unusual Machines has 15.12 million outstanding shares, and 13.08 million free float traded shares.

Its market cap is US$178.89 million. Its 52-week high and low share prices are US$23.62 and US$0.98 per share, respectively.