Drone Manufacturer Invests in Massive US$1.5B XTEND Merger

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1. Ownership and Share Structure Information

The information listed above was updated on the date this article was published and was compiled from information from the company and various other data providers.

With investment support from drone manufacturer Unusual Machines Inc. (UMAC:NYSEAMERICAN), Israeli drone operating system company XTEND is preparing to enter Nasdaq with a valuation of US$1.5 billion through a merger with JFB Construction and Development Inc., a company listed in New York, noted a report by Sophie Shulman on the website CTECH on February 17.

Instead of opting for a traditional IPO, XTEND will merge with JFB in an all-stock deal.

The merger involves a strategic investment of US$152 million from investors such as Eric Trump, son of U.S. President Donald Trump, Protego Ventures (which led XTEND's previous funding round), Unusual Machines, American Ventures LLC, and Aliya Capital, the article noted.

According to the agreement, XTEND shareholders will own about 70% of the merged entity on a fully diluted basis, while JFB shareholders will hold approximately 30%. The deal has received unanimous approval from both companies' boards and from JFB shareholders representing a majority of its outstanding common stock. The transaction is expected to be finalized by mid-2026. Once completed, the combined company will be renamed XTEND AI Robotics and will trade on Nasdaq under the ticker symbol XTND.

XTEND said it specializes in developing advanced autonomous systems for defense, public safety, and private security applications, all built on its proven XOS operating system. Its products utilize remote-operation capabilities, allowing various aerial, ground, and maritime drones to perform complex and dynamic missions with immediate readiness.

The merger is anticipated to support the expansion of NDAA-compliant domestic manufacturing at XTEND's production facility in Tampa, Florida, and to speed up the delivery of its systems to customers in the United States, NATO member countries, and Asia.

Founded in 2018 by Aviv Shapira (CEO), Matteo Shapira (CXO), Rubi Liani (CTO), and Adir Tubi (CQO), XTEND operates in Israel, the United States, and Singapore. About six months ago, the company completed a US$70 million funding round co-led by Protego Ventures and Aliya Capital, with contributions from Len Blavatnik's Claltech, Union-Tech Ventures, and Chartered Group. Additional investors include TAU Ventures.

"The demand for systems that keep operators out of harm's way is surging as the global security environment grows more volatile, and this represents one of the largest market opportunities in defense technology today," Shapira said. "By combining our platform with JFB, we are acquiring the resources we need to scale our manufacturing capabilities in the US and gaining access to the US public markets."

According to a release by Market News Updates News Commentary published by Stockwatch on February 19, with its headquarters and production facility located in Tampa, the merged company aims to establish itself as a leading U.S. provider of AI-driven autonomous defense and security solutions.

XTEND specializes in delivering cutting-edge autonomous systems for defense, public safety, and private security applications, all built on its battle-tested XOS operating system. The company's products leverage remote operational capabilities, allowing various air, ground, and maritime drones to carry out complex and dynamic missions with immediate operational readiness, the release noted.

This is not UMAC's first tie to the Trump family, as in November 2024, Donald Trump Jr. became a member of Unusual Machines' advisory board, commending the company for its efforts to “bring drone manufacturing jobs back to the USA.”

Subcontract to Provide AI Processing Systems to the Government

On February 20, another release published on Stockwatch noted that Safe Pro Group Inc., a creator of AI-driven defense, security, and situational awareness solutions, announced it has secured a subcontract to provide AI processing systems to the U.S. government in relation to another UMAC investment.

This subcontract, valued at US$1 million, comes from a prime contractor working with the U.S. government. The internal development and initial low-rate production of these systems were supported by strategic investments from prominent U.S. companies, including ONDAS Inc. and Unusual Machines.

According to Safe Pro's website, its "patented SpotlightAITM AI-powered drone imagery analysis technology is actively being utilized in Ukraine by multiple international humanitarian mine action organizations and government agencies. It is identifying and locating landmines and unexploded ordnance (UXO) every day."

The software has been used to process more than 2.4 million images totaling 34 terabytes and has returned 44,780 landmine and UXO (unexploded ordinance) detection, Safe Pro said.

Analyst: Co. Positioned for Substantial Growth This Year

Unusual Machines and other companies in the unmanned sector could benefit significantly if U.S. President Donald Trump's proposed US$1.5 trillion defense budget for fiscal year 2027 becomes a reality, according to a research note by Needham & Co. Analyst Austin Bohlig dated January 8.

Bohlig stated, "If enacted, we expect a growing share of incremental defense spending to be directed toward unmanned and autonomous technologies, which will significantly expand the total addressable market across the unmanned ecosystem."

Needham has set a target price of US$20 per share for Unusual Machines, which was trading at approximately US$14.68 per share at the time of the report, indicating a potential 36% return for investors. UMAC is rated as a Buy.

The company is positioned for substantial growth this year, with several catalysts expected to drive its performance, as noted by Bohlig. Needham has labeled 2026 as "The Year of the Drone," predicting that the "unmanned supercycle will meaningfully inflect" and lead to multiple record-setting years for drone procurement. This outlook is favorable for Unusual Machines, a key domestic supplier of affordable, flight-critical drone components.

Bohlig wrote, "Unusual Machines' robust growth profile, scarcity value, and strong ties to the Trump Administration justify a 15x enterprise value:sales premium multiple compared to our drone comp group."

Bohlig identified several significant catalysts for Unusual Machines this year. The company is expected to fulfill most of its approximately US$20 million backlog in the first half of 2026. This backlog, along with the company's retail business, should cover the consensus full-year 2026 revenue estimate of US$25 million.

Additional orders are anticipated from the ramp-up of three high-volume federal U.S. programs: PBAS (Purchase-Built Attritable Systems), the US$1 billion Drone Dominance program, and SkyFoundry. PBAS is the first large-scale, low-cost drone procurement program, awarded in the second half of 2025, with Unusual Machines supplying components to all three initial winners.

The first tranche was valued at US$35 million. The Drone Dominance Program is expected to procure about 340,000 small drones over two years, with the first tranche for 30,000 drones expected this quarter. SkyFoundry, the U.S. Army's program to produce up to 10,000 small drones per month, represents a potential $60 million market opportunity for Unusual Machines. The Federal Communications Commission's recent ban on foreign-produced drones and components expands these opportunities for domestic suppliers, providing a tailwind for Unusual Machines' long-term growth.

Another catalyst is Unusual Machines reaching break-even, anticipated in Q4 2026. However, the company faces challenges in order fulfillment, as it is behind schedule in meeting its original production target at its new Orlando-based motor manufacturing facility.

As the company scales, both cash burn and expenses are expected to rise, but the revenue ramp and improving gross margins support a clear path to break even at a $10 million quarterly revenue run rate, the analyst said.

The Catalyst: Sector at a Crucial Juncture

The aerospace and defense industry is at a crucial juncture as it moves into the latter part of the decade, according to the "2026 Aerospace and Defense Industry Outlook" published on November 13, 2025, by the Deloitte Research Center for Energy and Industrials. The report emphasizes that factors that have shaped the industry in recent years—such as digital transformation, supply chain disruptions, talent shortages, and geopolitical events—are now converging with new influences like agentic AI, emerging vehicles, and the rapid development of autonomous systems. Defense priorities are shifting towards the swift deployment of AI-enabled systems and collaborative combat aircraft. Deloitte analysts noted that "'Speed to field' is becoming the unifying metric across portfolios."

Drones are being utilized in a wide range of applications, including AI-driven navigation, defense contracts, emergency response technologies, and logistics automation, as reported by Kate Stalter for U.S. News & World Report on December 4, 2025. The military's use of drones is also on the rise. Scott Sacknoff, president and index manager at Spade Defense Index, stated, "Roughly every 20 years, new technologies arise that change the nature of warfare. Drones are the latest innovation, and the war between Russia and Ukraine is the laboratory highlighting their importance for future conflicts around the world."

Spade, located in Bethesda, Maryland, tracks the performance of companies involved in the development, manufacturing, and operations of U.S. defense, security, and aerospace industries. The Invesco Aerospace & Defense exchange-traded fund (PPA) follows the Spade Defense Index.

According to Grand View Research, the global drone market was valued at $73.06 billion in 2024 and is expected to grow to $163.6 billion by 2030, with a compound annual growth rate (CAGR) of 14.3% from 2025 to 2030. This growth is largely driven by rapid technological advancements in drones, improvements in battery efficiency, AI-driven autonomous systems, and enhanced imaging sensors, which are broadening drone applications across various industries.

Ownership and Share Structure¹

As for ownership and share structure, eight strategic entities own 8% of Unusual Machines, including the CEO, Evans, with 3.03%. More than 100 institutions hold 35%, including The Vanguard Group Inc. with 4.34%. Retail investors have the rest.

Unusual Machines has 36.88 million shares outstanding. Its market cap is US$495.61 million. Its 52-week range is US$4.45–20.15 per share.