Donald Trump Jr. Joins Advisory Board to Boost U.S. Drone Manufacturing

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. 
3. James Guttman 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.

Unusual Machines Inc. (UMAC:NYSEAMERICAN), a U.S.-based manufacturer specializing in drones and drone components, has announced the addition of Donald Trump Jr. to its advisory board. This move is part of the company's broader strategy to strengthen its domestic manufacturing capabilities and expand its presence in the U.S. drone market.

CEO Allan Evans highlighted Trump Jr.'s potential to contribute to investor alignment and high-level networking, stating, "He brings a wealth of experience, and I look forward to his advice and role within the company as we continue to build our business."

The announcement coincides with Unusual Machines' efforts to capitalize on legislative and market trends favoring domestic manufacturing. The company recently launched the Brave F7 FPV Flight Controller, a key component aligned with U.S. Department of Defense standards under the Blue UAS framework. Evans noted that this initiative underscores the company's commitment to reducing reliance on foreign suppliers and addressing national security concerns.

Donald Trump Jr., also an investor in the company, emphasized the importance of this mission, stating in the press release, "It is also obvious that we must stop buying Chinese drones and Chinese drone parts. I love what Unusual Machines is doing to bring drone manufacturing jobs back to the U.S.A. and am excited to take on a bigger role in the movement."

The announcement comes as the global drone market continues to grow, with projections estimating it will reach US$54.6 billion by 2030. Unusual Machines' strategic focus on domestically produced components positions it to benefit from U.S. government initiatives aimed at reducing dependence on Chinese technology, including the Countering CCP Drones Act.

Unusual Machines has also reported significant revenue growth, with its retail business experiencing a 37% year-over-year increase. In addition, the company has secured approximately 7,000 orders for its Brave F7 Flight Controller, with plans to introduce new components by the end of the year.

Innovation and Demand in Aerospace and Defense

A report from Deloitte, published on October 23, detailed the sector's resilience amidst ongoing challenges, including supply chain issues and workforce shortages. The industry experienced a full recovery in commercial air travel demand, with global passenger traffic increasing by 11.9% year-to-date as of August 2024. Defense spending also surged, exceeding US$2.4 trillion in 2023, driven by escalating geopolitical tensions. The report noted that artificial intelligence (AI) and advanced air mobility (AAM) technologies are becoming critical drivers of innovation in areas such as maintenance and unmanned systems.

The unmanned aerial systems (UAS) market, a rapidly growing segment of aerospace, has drawn attention for its dual applications in defense and commercial sectors. Deloitte noted that a significant portion of the US$61.2 billion defense budget for air power in fiscal 2025 was allocated to UAS programs. Commercial operators are also expanding their use of drones in industries such as agriculture and logistics, buoyed by regulatory advancements like the Federal Aviation Administration's approval of beyond-visual-line-of-sight operations in specific areas.

According to a November 27 report from Forbes, the industry's global integration is both a strength and a challenge. The looming possibility of increased tariffs on imports from China, Mexico, and Canada has the potential to disrupt complex supply chains that cross borders multiple times during production. The report highlighted concerns over how these tariffs might affect the value basis for aerospace components and subassemblies, a key consideration for a sector heavily reliant on international cooperation.

On December 7, Fortune highlighted the transformative impact of emerging technologies on the defense sector. Companies like Palantir Technologies and SpaceX have outpaced traditional aerospace giants in market valuation, reflecting a growing emphasis on AI and space-based capabilities. Palantir's recent partnerships to integrate AI-driven technologies into autonomous systems and its role as a prime contractor for the Pentagon underscore a broader shift towards technology-centric solutions in defense operations.

Catalysts Driving Growth in Domestic Drone Manufacturing

Several key catalysts are expected to drive Unusual Machines' growth in the near term. The addition of Donald Trump Jr. as an advisor is anticipated to enhance the company's ability to secure strategic partnerships and investor interest. As CEO Allan Evans explained in an interview with Streetwise Reports, "The signaling function of his appointment alone opens doors to higher-level opportunities, particularly in mergers, acquisitions, and financing."

The company is also leveraging its recent product launches to expand its market share. Its Brave F7 Flight Controller, compliant with Blue UAS standards, has already been integrated into defense supply chains, with ongoing tests in Ukraine. Global conflicts, including the situation in Ukraine, have created unprecedented demand for drones and components, further amplifying the market opportunity.

Additionally, Unusual Machines has streamlined its capital structure by eliminating convertible debt and maintaining a low burn rate, which CEO Evans described as a significant advantage in the microcap sector. "The cap table's totally clean, and our time horizon is stretched way out," Evans noted.

Looking ahead, the company aims to scale its domestic component manufacturing business and pursue potential acquisitions to enhance its competitive positioning. The growing demand for U.S.-made drones and components, coupled with Unusual Machines' strategic alignment with regulatory and defense priorities, positions the company for continued expansion. As Evans summarized, "We are building a robust alternative to Chinese-dominated supply chains, aligning with what the U.S. drone industry needs now more than ever."

Shaping the Future: Third-Party Insights on Unusual Machines

In a December 9 research note, Dr. Ashok Kumar of ThinkEquity reaffirmed a "Buy" rating on Unusual Machines and raised the target price from US$4.00 to US$10.00. Dr. Kumar cited the company's strategic focus on defense-oriented drone manufacturing and its successful capital restructuring efforts as key factors in this upgrade. He remarked, "The company anticipates a strong Q4 2024, driven by holiday retail sales and enterprise component shipments." He also pointed out that the company's U.S.-made Brave 7 flight controller had been approved by the Defense Innovation Unit of the U.S. Department of Defense, which he described as a critical milestone for positioning Unusual Machines within the defense sector.

Dr. Kumar also commented on the company's financial performance in Q3 2024, noting a 9% quarter-over-quarter revenue increase to US$1.53 million, with a gross margin of 26%. While the company reported a net loss of US$2.1 million due to non-recurring expenses such as IPO costs and debt conversion fees, Kumar emphasized the company's efforts to maintain a healthy cash position. "Unusual Machines raised an additional US$1.733 million in net proceeds from a private placement in October, underlining its focus on cash flow management," he added.

Technical analyst Clive Maund echoed this optimism in his December 11, 2024, analysis. Maund highlighted Unusual Machines' ability to carve out a niche in a highly competitive drone market by leveraging its defense partnerships and focusing on onshoring production. He stated, "With its innovative approach to product development and strategic positioning, Unusual Machines is set to benefit from increasing demand for domestically produced drone components." Maund also pointed out that the appointment of Donald Trump Jr. to the company's advisory board had drawn attention to the company and could enhance its visibility and strategic opportunities.

Ownership and Share Structure

About 21.6% of the company is owned by management and insiders, UMAC said. The rest, 78.4%, is retail.

The company's market cap is around US$114 million, with 12.6 million shares outstanding. It trades in a 52-week range of US$0.98 - $23.62