Unusual Machines Invests in Co. With Proprietary Camera Material

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Prominent NDAA-compliant drone components provider Unusual Machines Inc. (UMAC:NYSEAMERICAN) has entered into a definitive agreement with LightPath Technologies Inc., a provider of advanced optics and imagining systems, for a private placement to purchase LightPath's stock, UMAC announced September 16.

As part of the agreement, both UMAC and Ondas Holdings Inc., a leading provider of autonomous aerial and ground robot solutions, took place in a private placement of LightPath's shares for US$8 million, or US$4 million from both UMAC and Ondas.

The placement involves the sale of 1.6 million shares of common stock at US$5.00 per share. The funds will be used for working capital to support key LightPath commercialization initiatives and general corporate purposes. The offering is anticipated to close around September 17.

"We anticipate continued growth in drone demand across all industries, especially in defense, informed by the ongoing conflict in Ukraine," said Unusual Machines Chief Executive Officer Allan Evans. "While the use of infrared cameras on drones is expanding, the reliance on Germanium has posed manufacturing and supply chain challenges. China's export restrictions on Germanium, a major global supplier, are prompting a shift towards American manufacturing. Our focus on U.S. drone manufacturing aligns with LightPath's proprietary BlackDiamond™ Glass, a cost-effective American-made alternative to Germanium, and we are eager to expand this partnership."

Analyst Barry M. Sine from Litchfield Research compared UMAC to the "Intel Inside" of the drone sector, highlighting that it supplies US$300 worth of components for a US$500 drone.

Securing the partnerships with "two prominent players in the drone industry is a significant strategic milestone for LightPath to advance the use of our uncooled camera technology in drones," LightPath CEO Sam Rubin said. "Through these partnerships, we will leverage our complementary strengths to enhance the use of infrared cameras for customers in commercial, defense, and government sectors. Cameras mounted on drones offer powerful capabilities for a wide range of applications, from infrastructure inspection to search and rescue. We believe our ability to build complete thermal cameras in highly customized variations for specific applications will position us as a key player in the rapidly growing drone industry."

Eric Brock, the chairman and CEO of Ondas Holdings, remarked: "We provide mission-critical networks, autonomous drones, counter-drone solutions, and AI capabilities to customers in rail, energy, public safety, critical infrastructure, and government markets."

Co. Fresh Off Acquisition of Rotor Lab

Earlier this month, Unusual Machines announced the completion of its acquisition of Rotor Lab Pty Ltd., an Australian firm specializing in electric motors and propulsion systems for unmanned aerial systems (UAS). It was acquired through an all-stock transaction valued at US$7 million, which includes a US$3 million earnout. Initially announced on June 13, this acquisition strengthens Unusual Machines' portfolio with high-performance motors suitable for both commercial and defense applications.

The two companies have already collaborated to develop a range of motors, including the 2207, 2807, and 3220 sizes, which will be among the first produced at Unusual Machines' new motor facility in Orlando, Florida, scheduled to open in September 2025. Rotor Lab's Canberra, Australia, location will continue to serve as an engineering hub for motor design and prototyping, complementing U.S. manufacturing operations.

"This acquisition adds valuable engineering expertise, proven prototyping processes, and a second production location for Unusual Machines," Evans said. "By integrating Rotor Lab's capabilities with ours, we are accelerating execution and can deliver better motors to our customers faster."

Andrew Simpson, previously CEO of Rotor Lab, will assume the role of vice president of Motor Production at Unusual Machines and will continue to oversee Rotor Lab's operations.

Expanding Production Abilities

Based in Florida, UMAC is a manufacturer of drone components with a focus on first-person view (FPV) systems for both commercial and defense sectors. The company aims to secure a pivotal role in the unmanned aerial vehicle (UAV) supply chain by offering NDAA-compliant components for cost-effective, remote-piloted drones.

In July, Unusual Machines announced that its Fat Shark Video Transmitter (VTX) received approval from the Defense Innovation Unit for inclusion in the Blue UAS Framework, a designation that ensures cybersecurity compliance for Department of Defense use. The VTX joins a growing list of UMAC's core FPV components that meet the standards of this federal procurement program.

The VTX offers a unique position in the Framework, providing analog video transmission, which is well-suited to the new combat paradigm of manufacturing low-cost drones capable of transmitting low-latency video over long distances. Consequently, the company is expanding its production capabilities with a new 17,000-square-foot motor manufacturing facility in Orlando, set to open in September.

Analyst Barry M. Sine from Litchfield Research compared UMAC to the "Intel Inside" of the drone sector, highlighting that it supplies US$300 worth of components for a US$500 drone. "As with Intel during the PC boom, UMAC's upside lies in being embedded in many of the units sold," he noted.

Sine said he anticipates that the rest of 2025 will be particularly pivotal, as recent policy changes are expected to boost U.S. drone production beyond previous budget forecasts. UMAC's success will hinge on its ability to effectively develop, market, sell, and scale its operations. Litchfield Hills values UMAC at twice the level of its industry peers, assuming it can maintain long-term growth. Sine has assigned UMAC a Buy rating, with a price target of US$20.

The Catalyst: Defense Sector Continues to Evolve

The global drone market was anticipated to be valued at US$73.06 billion in 2024 and is expected to grow to US$163.60 billion by 2030, with a compound annual growth rate (CAGR) of 14.3% from 2025 to 2030, according to Grand View Research.

This expansion is primarily fueled by rapid technological advancements in drones, improvements in battery efficiency, AI-driven autonomous systems, and enhanced imaging sensors, which are broadening the applications of drones across various sectors, Grand View noted.

In 2024, North America led the drone market, capturing over 39% of the share; the hardware segment accounted for the largest revenue share by component, exceeding 58% in 2024; and the multi-rotor segment held the largest revenue share by product in 2024, researchers said.

In 2025, the U.S. defense sector continued to evolve, supported by unprecedented government budgets, increased private investment, and a renewed focus on technological agility. Geopolitical tensions, including rising conflicts between global powers, fueled increased demand for advanced defense systems. At the same time, drone technologies and early-stage defense innovations became central to reshaping the sector's operational priorities.

In July, Defense Secretary Pete Hegseth announced significant policy changes affecting drone production. In a memorandum dated July 10, Hegseth lifted restrictions that were "hindering drone production," citing the urgent need for mass deployment of cost-effective, American-made unmanned aerial systems. "Drones are the biggest battlefield innovation in a generation," he wrote, emphasizing the need for the U.S. to scale up production to match the volume produced by adversaries.

Support for these changes extended to the executive level. On June 6, President Donald J. Trump signed an executive order aimed at reducing regulatory uncertainty and streamlining certification processes. The order also called for coordination between the Department of Defense and the Federal Aviation Administration to improve airspace access for drone training.

Alongside policy reform, market demand for drones in emergency response surged. According to a July 30 commentary from FN Media Group, the emergency responder drone market was valued at US$5.68 billion in 2023 and is projected to grow to US$12.5 billion by 2032.

Ownership and Share Structure

About 7.5% of the company is owned by management and insiders, UMAC said. The rest, 92.5%, is retail and institutional investors.

Unusual Machines has 31.56 million shares outstanding as of September 16. Its market cap is US$339.16 million. Its 52-week high and low share prices are US$23.62 and US$1.28 per share, respectively.