Drone Manufacturer Targets Military Demand With Battery Innovator Acquisition

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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.

Leading NDAA-compliant drone component manufacturer Unusual Machines Inc. (UMAC:NYSEAMERICAN) announced it has signed a definitive agreement to acquire DroneNX LLC, which operates as Upgrade Energy, a company specializing in the manufacture of battery and power systems for unmanned aerial systems, according to a May 11 release.

The deal, valued at around US$52 million, will be settled through a mix of cash and stock, with additional performance-based earnout considerations. This acquisition is set to enhance Unusual Machines' existing domestic production and engineering framework by integrating advanced battery technology and expanding its range of drone components.

Upgrade Energy operates from an 18,500-square-foot facility located in Torrance, California, and employs a team of about 30 professionals in engineering and production roles. Unusual Machines has plans to further extend these operations by establishing a new battery pack production facility in Orlando in the near future.

"Batteries are a foundational part of drone power systems and have a huge impact on performance and reliability," Unusual Machines Chief Executive Officer Allan Evans said. "Upgrade Energy adds the best battery and power systems expertise we have worked with. In addition to the battery expertise, Matt and the entire Upgrade team share our culture, attitude, and represent a huge windfall in terms of adding talent to our workforce."

Upgrade Energy Matthew Barnard highlighted the benefits of scaling operations and accelerating technological development through Unusual Machines' support.

"We built Upgrade Energy to solve flight time and reliability challenges for drone operators through high-performance drone batteries manufactured in the United States," Barnard said. "Joining Unusual Machines gives us the scale and operational support to move faster and accelerate the development of our technology. We believe the drone industry is entering an important phase of growth, and we're excited to contribute to that momentum as part of Unusual Machines.

The finalization of this acquisition is pending customary closing conditions, including an audit of Upgrade Energy for the year 2025. Once completed, Upgrade Energy will be integrated into Unusual Machines' expanding portfolio of drone component and technology companies, the release said.

Funding Will Enhance Inventory Investment, Supply Chain Readiness

UMAC recently secured approximately US$150 million in funding aimed at enhancing its inventory investment and improving supply chain readiness to meet growing customer demands.

"We are focused on being material complete and ready to deliver so we can meet demand as it continues to scale," Evans said at the time. He highlighted that the main challenge in the market is not demand but rather supply chain, production timing, and scalability.

The company's investment strategy is informed by a clearer understanding of procurement programs and demand signals within the industry, particularly influenced by significant U.S. drone procurement initiatives like the Department of War's Drone Dominance efforts. These initiatives have not only clarified the market for Unusual Machines but also underscored the need for compliant, U.S.-based production to meet regulatory and procurement requirements effectively.

In April, Unusual Machines announced substantial upgrades to its motor manufacturing operations in Orlando, which are expected to more than double the facility's daily production capacity. The company, which previously produced about 15,000 motors monthly, has added second and third shifts, boosting daily production from approximately 700 to 1,500 parts.

"We continue to push production higher by adding equipment and building out the team," UMAC President and Chief Operating Officer Andrew Camden has said.

Looking ahead, Unusual Machines plans to significantly expand its workforce at the motor factory to support the increased production demands. Additionally, the company is set to install a high-volume automated motor production line in the latter half of 2026, aiming to further increase the manufacturing output at the facility. These developments reflect Unusual Machines' commitment to scaling up production in response to the evolving demands of the drone industry.

Analyst: UMAC Successfully Ramping Up Production

In a recent updated research note on May 4, Litchfield Hills analyst Barry Sine addressed the challenges highlighted by a Wall Street Journal article regarding the U.S. efforts to diminish reliance on Chinese drone components. The article, titled "The U.S. Wants to Break China’s Drone Dominance. Here’s Where It Will Struggle," outlined the obstacles faced by U.S. firms in scaling drone component production. Contrary to these difficulties, Sine pointed out that Unusual Machines has been making significant strides in this area.

According to Sine, Unusual Machines has successfully ramped up its domestic production capabilities, thereby reducing its dependence on Chinese components. The company has boosted its motor production from 20,000 to a projected 120,000 units monthly, fueled by robust demand from enterprise and government sectors. This increase is part of a broader strategy to create an integrated subsystem that includes NDAA-compliant motors, flight controllers, ESCs, and video systems, all currently marketed to enterprise and government clients.

Financially, Unusual Machines is poised for substantial growth, with enterprise revenue expected to rise from US$27 million in 2026 to US$46 million in 2027, he said. This growth is anticipated as the company continues to expand its production capacity and automation. Sine also projected a significant increase in gross margins, from 35% in 2025 to 48% in 2027, attributing this to enhanced efficiency in motor production.

Sine emphasized the company's proactive measures in establishing a robust U.S. manufacturing base for drone components.

"The Journal is correct that standing up a high-volume U.S. drone component manufacturing business is difficult, but Unusual Machines is doing exactly that," he remarked.

Sine detailed the company's strategic moves, including the acquisition of an Australian motor manufacturer, recruitment of top-tier manufacturing executives, and the opening of a well-staffed production facility. He noted that the facility is already producing headsets and motors on a large scale, operating three shifts daily, including weekends, with current output at about 20,000 motors per month. This figure is expected to increase sixfold by the end of the year as new automated equipment is installed and becomes operational.

Sine has given Unusual Machines a Buy rating with a target price of US$25 per share, indicating a potential 76% return from the current price.

The Catalyst: US Military Drone Demand Set to Hit New Highs

The U.S. military has unveiled a monumental US$1.5 trillion budget proposal for the upcoming fiscal year, marking a historic high in funding for drone warfare and counter-drone technologies, according to an April 21 report by Jeremy Hsu for Ars Technica.

This allocation within the FY2027 budget of the U.S. Department of Defense is poised to exceed the defense budgets of many nations and would place it among the world's top 10 military spenders, surpassing the likes of Ukraine, South Korea, and Israel. The Pentagon is seeking a substantial US$53.6 billion to enhance the U.S. capabilities in drone production and procurement, drone operator training, logistics for drone operations, and the expansion of counter-drone systems to protect additional U.S. military locations.

This funding initiative is designated for the Defense Autonomous Warfare Group (DAWG), a unit that was formed in late 2025 and is set for a significant budget increase from the US$226 million allocated in the 2026 fiscal year. During a press briefing on April 21, Jules Hurst, a senior Pentagon official acting as the Under Secretary of Defense, expressed high expectations for the DAWG.

"I think of the DAWG as a pathfinder — they’re out there finding the best technology for us and working on integration," Hurst stated. He highlighted the active role of the DAWG in collaborating with tech companies to test and refine various autonomous systems and tools, providing immediate and practical feedback.

Additionally, the budget plans include an allocation of US$20.6 billion for the acquisition of one-way attack drones and advanced drone aircraft under the U.S. Air Force’s Collaborative Combat Aircraft program, Hsu said. This initiative focuses on developing drone prototypes that can coordinate with manned fighter jets. A portion of these funds will also support the development of defensive measures against small drones and finance the U.S. Navy’s Boeing MQ-25 drone, which is designed to refuel carrier-based fighter jets midair, thereby extending their operational range.

The global military drone market size was estimated at US$47.38 billion in 2025 and is projected to reach US$98.24 billion by 2033, growing at a CAGR of 8.9% from 2026 to 2033, Grand View Research noted.

"The market growth is driven by rapid technological advancements in AI, machine learning, and autonomous navigation, enabling real-time decision-making and swarm operations, as well as escalating demands for border security, counterterrorism, and electronic warfare capabilities that leverage long-endurance platforms with enhanced payload capacities," Grand View noted.

Rising investments from major players such as the U.S. Replicator initiative, NATO modernization programs, and partnerships between defense contractors and tech firms are accelerating R&D in stealth, 5G-enabled real-time communication, and counter-drone defenses, researchers noted.

"The adoption of military drones is also being propelled by technological innovations that enhance operational capabilities, such as improved sensor systems, high-resolution cameras, advanced avionics, and seamless integration with real-time data networks, including 5G," Grand View said. "These advancements enable drones to perform a variety of critical missions, including intelligence, surveillance, and reconnaissance (ISR), target acquisition, and precision strikes with increased accuracy and efficiency, thereby driving the military drone industry."

Ownership and Share Structure¹

As for ownership and share structure, eight strategic entities own about 7% of Unusual Machines, including the CEO, Evans, with 3.33%. About 138 institutions hold 34%, including Vanguard with 3.73%. Retail investors have the rest.

Unusual Machines has 47.78 million shares outstanding. Its market cap is US$641.27 million. Its 52-week range is US$4.67–23.38 per share.