Unusual Machines (UMAC) Emerging Growth Conference 93 summary

Business and industry update

• Demand for onshore drone manufacturing and components has surged due to recent federal regulations, with significant growth in the defense sector and plans to expand into enterprise and consumer markets as regulations evolve.

• Acquisition of Upgrade Energy, a battery pack manufacturer, fills a critical gap in the drone powertrain and supports production of small, attritable drones, with projected unit growth from 90,000 this year to over 300,000 by 2028.

• Manufacturing capacity and workforce have expanded rapidly, from 20 employees a year ago to a projected 500 by year-end, with automated lines increasing motor output from 30,000 to over 120,000 units per month.

• Revenue has scaled alongside workforce growth, with each quarter seeing near doubling in both headcount and revenue, supported by investments in equipment and new facilities.

• Margin pressure was experienced in Q1 due to rapid hiring and training, but gross margins are expected to recover to the mid-to-high 30% range in the coming quarters.

Financial and strategic developments

• Raised $150 million in March via a confidential public offering, with $75 million allocated for inventory purchases and $26 million for the Upgrade Energy acquisition.

• Strategic shift to source raw materials outside China to support U.S. manufacturing, with long lead times requiring advance purchases to meet future demand.

• Additional battery facility planned in Orlando to further boost capacity and support anticipated growth.

• No debt, strong working capital, and a simple capital structure position the company for continued expansion and resilience through 2027.

• The Upgrade Energy acquisition is expected to close within 45-90 days, pending financial audits.

Forward-looking statements and growth outlook

• Anticipates continued strong demand, especially as the FCC ban on DJI drones creates a market void, and expects regulatory changes to open new enterprise and consumer opportunities within 12 months.

• Preparing for phase two of the Drone Dominance Program, anticipated in September, which could further accelerate growth.

• Focused on meeting customer needs for U.S.-manufactured drone components and maintaining supply chain resilience amid ongoing global conflicts.

• Plans to sustain rapid hiring and capacity expansion to keep pace with market demand.

• Strong start to 2026, with all anticipated trends materializing at a larger scale than expected.