Co. To Make New Drone Motor To Fulfill Customer Order
Research Report

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 Inc.
3. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
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.

Disclosures for Litchfield Hills Research,  Unusual Machines Inc., February 27, 2025

Analyst Certification We, the Litchfield Hills Research Department, hereby certify that the views expressed in this research report accurately reflect our personal views about the subject company and the underlying securities. FINRA Compliant Research Report We, the Litchfield Hills Research Department, hereby certify that this report is compliant with FINRA research rules 2241, 3110. MiFID II Compliant Research Report Our research is classified as minor non-monetary benefit under MiFID II. This applies to all forms of transmission, including email, website, and financial platforms such as Bloomberg, FactSet, S&P Global, Refinitiv and 13 others. We do not seek payment from the asset management community and do not have any execution function. Investors can continue to receive our research under the MiFID II regime without the need for a contract for services to be put in place. This applies to all forms of transmission, including email, website, and financial platforms. Litchfield Hills Research LLC Rating System BUY: We expect the stock to provide a total return of 15% or more within a 12-month period. HOLD: We expect the stock to provide a total return of negative 15% to positive 15% within a 12-month period. SELL: We expect the stock to have a negative total return of more than 15% within a 12-month period. Total return is defined as price appreciation plus dividend yield. Other Disclosures Litchfield Hills Research, LLC (“LHR”) is not a U.S. broker-dealer registered with the U.S. Securities and Exchange Commission nor a member of Financial Industry Regulatory Authority. This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would subject LHR or any divisions, subsidiaries or affiliates to any registration or licensing requirement within such jurisdiction. All material presented in this report, unless specifically indicated otherwise, is under copyright to LHR and the subject company. None of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied, or distributed to any other party, without the prior express written permission of LHR or the subject company. All trademarks, service marks and logos used in this report are trademarks, service marks, registered trademarks, or service marks of LHR or its affiliates. The information, tools and material presented in this report are provided to you for information purposes only and are not to be used or considered as an offer or the solicitation of an offer to sell or to buy or subscribe for securities or other financial instruments. LHR may not have taken any steps to ensure that the securities referred to in this report are suitable for any particular investor. The investments or services contained or referred to in this report may not be suitable for you and it is recommended that you consult an independent investment advisor if you are in doubt about such investments or investment services. Nothing in this report constitutes investment, legal, accounting or tax advice or a representation that any investment or strategy is suitable, appropriate to your individual circumstances, or otherwise constitutes a personal recommendation to you. LHR does not offer advice on the tax consequences of investment, and you are advised to contact an independent tax adviser. LHR believes the information and opinions in the Disclosure Appendix of this report are accurate and complete. Information and opinions presented in this report were obtained or derived from sources LHR believes are reliable, but LHR makes no representations as to their accuracy or completeness. Ownership and Material Conflicts of Interest The analyst owns no shares of the subject company. The analyst and his family have no known material conflicts of interest in authoring this report. Investment Banking and Fees for Services Litchfield Hills Research has not received compensation for advisory or investment banking services from the Company in the past 12 months. Litchfield Hills Research LLC has received compensation from the subject company for distribution and investor targeting services. Market Making Litchfield Hills Research, LLC does not make a market in the subject company's securities. Additional information is available upon request. LHR accepts no liability for loss arising from the use of the material presented in this report, except that this exclusion of liability does not apply to the extent that liability arises under specific statutes or regulations applicable to LHR. This report is not to be relied upon in substitution for the exercise of independent judgment.

© 2025 Litchfield Hills Research LLC, 79 Belgo Road, Lakeville, CT 06039, www.HillsResearch.com | Barry@HillsResearch.com 646-234-3333 * Important disclosures are located at the back of this report

Unusual Machines Inc. (UMAC:NYSEAMERICAN) will make a new drone motor for launch customer Red Cat Holdings Inc. (RCAT:NASDAQ), reported Litchfield Hills Research Analyst Barry Sine in a Feb. 27 research note.

"With this announcement, the company's total addressable market (TAM) in terms of announced components increases by 50%," to US$1.9 billion (US$1.9B) from US$1.3B, Sine wrote.

151% Return Potential

On the news, Sine reiterated Litchfield Hills' target price on UMAC of US$20 per share. In comparison, the drone parts manufacturer's share price at the time of the report was about US$7.96. From here, the return to target is 151%.

Unusual Machines' 52-week high and low share prices are US$23.62 and US$0.98, respectively.

The company remains a Buy.

More Parts, More Benefits

Sine pointed out the benefits to Florida-based Unusual Machines of adding additional types of components to its inventory. With this just announced, new motor, the company could provide 64% of the components needed to build a typical midsized drone.

What's more, reported Sine, the drone components firm is about to introduce two more products, one a radio receiver/transmitter (RX), the other a video receiver (VTX). These additions would take increase its requisite drone parts percentage to 86%. It would be able to provide the two receivers, a flight controller, an electronic speed controller, a camera and motors, all components but the drone frame, "which is relatively low tech," noted Sine.

With this expanded capability, the company's TAM would increase another 30%. Also, Unusual Machines could use its own components for its Rotor Riot retail business, now valued at about US$5M, thereby increasing its gross margin via vertical integration.

The analyst also highlighted that Unusual Machines is outsourcing the design and manufacture of all of its components to third parties, giving it significant potential to scale up.

"These moves are timely as the [U.S.] commerce department has initiated an Advanced Notice of Proposed Rule Making to ban imports of Chinese drone components," wrote Sine.

Such a trade barrier would open a window of opportunity to Unusual Machines given the U.S. imports almost all drone components from China. The rest comes from a few domestic suppliers.

Series of Catalysts

Sine listed five anticipated, upcoming events that could lift Unusual Machines' share price. They are:

1) The company debuting its RX and VTX.

2) These two new products increasing Unusual Machines' TAM.

3) The U.S. Department of Defense adding the company's motors to its Blue List of approved drone components for military use.

4) Unusual Machines receiving more components customers and orders.

5) Release of the company's Q4/24 earnings, expected in late March, which, Sine wrote, "should show strong retail sales and initial revenue from components." Litchfield Hills estimates revenue for the quarter to be about US$2M from retail and about US$100,000 from components.

Stock Specifics

Unusual Machines has 13.9 million (13.9M) shares outstanding. Its average daily volume is 5.2 million (5.2M).

The company's market cap is US$120.4M.