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Get filing alertsUnusual Machines acquiring DroneNX/Upgrade Energy for up to $52M in stock-and-cash deal
Filed May 11, 2026 · Period ending May 7, 2026 · ~1 min read
Key Changes
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UMAC will pay $25M in stock (1.79M shares at $13.95) plus $1M cash at closing, with up to $26M additional earnout if acquired business hits $10M revenue over two years. Deal expected to close within 120 days.
Item 1.01: Merger Agreement verify on EDGAR → -
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The 1.79 million shares issued to seller must be registered within 30 days of closing and effective within 60 days after filing, potentially creating near-term selling pressure once shares become freely tradable.
Item 1.01: Registration Rights verify on EDGAR → -
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Upgrade Energy's founder Matthew Barnard will stay on as CEO of the acquired subsidiary under an employment agreement, typical for ensuring continuity and hitting earnout targets.
Item 1.01: Employment Agreement verify on EDGAR →
Summary
Unusual Machines, a manufacturer of NDAA-compliant drone components, is acquiring DroneNX (doing business as Upgrade Energy) in a deal valued at up to $52 million. The structure includes up to $26 million upfront—roughly $25 million in newly issued stock and $1 million cash—plus a contingent earnout of up to $26 million if the acquired business generates $10 million in annual revenue over the next two years.
Retail investors should note the immediate dilution: 1.79 million new shares represent meaningful equity issuance, and those shares will be registered for resale quickly (within 90 days of closing), which could pressure the stock price. The earnout structure ties half the deal value to performance, reducing upfront risk but creating uncertainty about total cost. Watch for the closing announcement and any updates on Upgrade's revenue trajectory—if the business falls short of the $10M target, the effective purchase price drops significantly, potentially making this a better deal for UMAC shareholders.
Section-by-Section Diff
Event · Item 1.01 — Entry into a Material Definitive Agreement
Unusual Machines acquiring DroneNX/Upgrade Energy for $52M via stock, cash, and potential up to $26M earnout tied to revenue targets.
Added in current filing · verify on EDGAR →
On May 7, 2026, Unusual Machines, Inc. (the “Company”), a manufacturer of NDAA-compliant drone components, entered into a $52 million agreement and plan of merger (the “Merger Agreement”), with Upgrade Energy LLC, a newly formed subsidiary of the Company (the “Surviving Company”), DroneNX LLC d/b/a Upgrade Energy (“Upgrade”), and Matthew Barnard as the Member Representative of Upgrade, pursuant to which, the Surviving Company, will acquire all of the property, rights, privileges, licenses, powers and authority of Upgrade in exchange for 1,792,012 shares of Company common stock at $13.9508 per share and $1 million cash at closing with a potential post-closing earn-out payment of up to $26 million in cash, subject to the Surviving Company achieving an annual revenue target of $10 million during a two-year calculation period following the date of the Merger Agreement (with proportional adjustment for the second year).
The Company is acquiring Upgrade Energy for total consideration of up to $52 million. The deal structure includes 1,792,012 shares valued at $13.9508 each (approximately $25 million in stock), $1 million cash at closing, and a contingent earnout of up to $26 million if the acquired business hits $10 million in annual revenue over a two-year period.
Added in current filing · verify on EDGAR →
Pursuant to the Merger Agreement, the Company agreed to provide certain registration rights to the Member Representative (the “Registration Rights Agreement”) which provides for the Company to use commercially reasonable efforts to register, pursuant to the Securities Act of 1933 (the “Securities Act”), the shares of Company common stock to be issued to the Member Representative in connection with the Merger, and (i) to cause such registration statement to be filed within 30 days after Closing; and (ii) to be declared effective within 60 days after filing of such registration statement.
The Company has committed to register the 1.79 million shares being issued to Upgrade's seller within 30 days of closing and to have that registration declared effective within 60 days of filing. This means the shares could become freely tradable relatively quickly after the deal closes, potentially creating selling pressure on the stock.
Show 1 minor / wording change
Added in current filing · verify on EDGAR →
At Closing, the Company and the Member Representative intend to enter into an Employment Agreement which shall be in form and substance as mutually acceptable to the parties and whereby the Member Representative will serve as the Chief Executive Officer of the Surviving Company.
Matthew Barnard, the seller representative, will become CEO of the acquired subsidiary at closing under an employment agreement to be finalized. This retention of the founder/seller is typical in acquisitions to ensure continuity and achievement of earnout targets.
Event · Item 7.01 — Regulation FD Disclosure
Item 7.01 — Regulation FD Disclosure filed; see Key Changes for terms.
Added in current filing · verify on EDGAR →
the Company issued a press release announcing it entered into a Merger Agreement, pursuant to which, a newly formed wholly owned subsidiary, acquire Upgrade in exchange for 1,792,012 shares of Company common stock at $13.9508 per share and $1 million cash at closing with a potential post-closing earn-out payment of up to $26 million in cash, subject to the Surviving Company achieving a revenue target of $10 million during a two-year calculation period following the date of the Merger Agreement.
Unusual Machines disclosed it will acquire Upgrade through a newly formed subsidiary. The purchase price consists of approximately 1.79 million shares valued at $13.9508 each (roughly $25 million in stock) plus $1 million cash at closing. An additional earn-out of up to $26 million in cash is contingent on the acquired entity achieving $10 million in revenue over the two years following the merger agreement date.
Event · Item 9.01 — Financial Statements and Exhibits
Unusual Machines entered into a merger agreement on May 7, 2026, with a surviving company and Upgrade entity.
Added in current filing · verify on EDGAR →
Agreement and Plan of Merger dated as of May 7, 2026, among the Company, the Surviving Company, Upgrade, the Member Representative
Unusual Machines has executed a definitive merger agreement dated May 7, 2026. The parties include the Company, a surviving company entity, Upgrade, and a member representative. This represents a significant corporate transaction that will likely result in a business combination or acquisition.
Added in current filing · verify on EDGAR →
Form of Registration Rights Agreement, Exhibit A to the Merger Agreement
As part of the merger transaction, the parties have agreed to registration rights, which typically govern how and when securities issued in the merger can be registered for public sale. This affects shareholder liquidity and potential dilution post-transaction.
Added in current filing · verify on EDGAR →
Press Release dated May 11, 2026
The company issued a press release on May 11, 2026, publicly announcing the merger transaction. This indicates the company is actively communicating the deal to investors and the market.
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Figures/quotes linked to EDGAR · Narrative written by AI · Jun 1, 2026 · How we verify