Unusual Machines (UMAC) investor relations material

Market overview and growth strategy

• Focused on manufacturing drone components such as motors, flight controllers, ESCs, cameras, and headsets, with production based in the U.S. and expansion through acquisitions like Upgrade Energy.

• Driven by recent U.S. legislation (NDAA, FCC ban) requiring domestic production, leading to rapid demand growth, especially for defense applications.

• Supplying OEMs targeting major defense contracts, including the Drone Dominance program, with projected production ramping from 90,000 drones in 2024 to over 300,000 by 2028.

• Aggressively scaling operations, growing from 20 to over 220 employees in a year, with plans to exceed 500 by year-end and expanding manufacturing facilities.

• Investing heavily in automation and capacity, aiming to quadruple monthly motor output and bring battery production in-house.

Supply chain and operational execution

• Actively shifting supply chains away from China, sourcing critical components like magnets from Japan, with long lead times requiring advanced planning.

• Raised over $400 million in capital to support inventory, CapEx, and rapid scaling, maintaining a strong cash position of over $250 million.

• Operational cash burn remains low, with most cash outflows directed to inventory to meet future demand.

• Strategic investments in adjacent companies, such as a $30 million investment in PowerUs, provide additional capital returns and strengthen industry ties.

• Manufacturing is highly automated, with plans to further increase automation and capacity to meet surging demand.

Competitive landscape and regulatory environment

• Faces limited domestic competition at scale, with international competitors disadvantaged by U.S. regulatory bans and higher costs.

• Competitive advantages include significant capital reserves and speed of execution, enabling rapid market capture.

• Regulatory changes, such as the FCC ban on DJI drones, have opened a $10 billion market opportunity in the U.S.

• Bipartisan legislative support ensures ongoing demand for U.S.-made drone components, with little risk of regulatory reversal.

• Exploring additional funding sources, including potential government support, but no preferential treatment received.