XTI acquires Drone Nerds and closes $25M investment by Unusual Machines

XTI Aerospace (XTIA) announced that on November 10 it acquired Drone Nerds, one of the largest distributors and service providers of drones in the United States with more than $100M in 2024 annual revenue, greater than $55 million in revenue this year through June 30 and a ten-year record of profitability. Immediately following the acquisition, XTI closed a $25M private placement investment by Unusual Machines (UMAC), a strategic investor that manufactures and sells drone components and drones across a diversified brand portfolio. XTI issued 25,000 shares of newly designated Series 10 Convertible Preferred Stock (the “Series 10 Preferred Stock”), at a subscription amount of $1,000 per share of Series 10 Preferred Stock, convertible into shares of XTI’s common stock at a conversion price of $1.492 upon shareholder approval required by Nasdaq Listing Rule 5635. XTI plans to commence the proxy process for shareholder approval prior to year-end. XTI will benefit from Drone Nerds’ market-leading position in unmanned aircraft systems (UAS) solutions, which spans systems design and configuration including hardware and software for wide-ranging corporate and consumer operational missions. XTI also acquired a business focused on the development and marketing of enterprise drone solutions. The total purchase consideration was approximately $40M: $20 million in cash; $11.9M in the form of promissory notes, and $9.7M equity consideration, granted as units of the Drone Nerds subsidiary, which on or after May 1, 2026, can be exchanged for 6,524,576 common shares of XTI, representing 19.9% of the common shares of XTI outstanding pre-acquisition. Upon any conversion, the resulting XTI common stock will be locked-up until November 10, 2026.