Unusual Machines has completed its $52 million purchase of Upgrade Energy, a drone battery maker in Torrance, California. The Orlando company announced the closing on 19 October. Half of the price, agreed in May, is paid only if the batteries sell.
The fixed part is 1,792,012 Unusual Machines shares at $13.9508 each, plus $1 million in cash. The shares were worth about $25 million when the deal was signed, the company said in its August quarterly report. The other $26 million is cash, due if Unusual Machines books $10 million of revenue from batteries it makes itself within two years of closing.
Neither the release nor the company’s filings give Upgrade Energy’s own sales. The deal also took longer than planned. The May filing expected it to close within 120 days, by early September, once Upgrade’s 2025 accounts were audited.
Unusual Machines already makes flight controllers, motors and FPV headsets, and sells to hobby pilots through its Fat Shark and Rotor Riot brands. Batteries were the gap. Allan Evans, its chief executive, said the deal adds “a critical piece of the drone powertrain”. Matthew Barnard, Upgrade Energy’s chief executive, said the two companies would “expand U.S. production”.
The 2027 deadline
From 1 October 2027, the Pentagon may not spend money on batteries produced by CATL, BYD and four other Chinese companies. The rule is Section 154 of the defence authorisation act signed in December 2023. A battery counts as theirs if they assemble it or supply most of its parts, and the Secretary of Defense can waive the ban.
A pack assembled in California can still be built from imported cells. Neither the release nor the filings say where Upgrade Energy buys its cells. Unusual Machines’ own list of risks in the release names “battery cells”, tariffs and trade restrictions.
The Pentagon’s Blue UAS Framework, its list of approved drone parts, carries several Rotor Riot and Fat Shark components. It had no Upgrade Energy battery on 22 October.
Before the deal closed, Unusual Machines began expanding production and hiring at Upgrade Energy’s 18,500-square-foot plant in Torrance. In June it leased about 14,000 square feet in Orlando for the battery business, where it plans to build packs.
