Unusual Machines/UMAC

Unusual Machines Inc. 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 overall continues to rise, 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.