XTI Aerospace acquires Drone Nerds, closes $25 million strategic investment by Unusual Machines

XTI Aerospace, Inc., the developer of vertical flight technologies and the TriFan 600 next-generation vertical takeoff and landing (VTOL) aircraft for commercial and defense aerospace applications and the emerging Vertical Economy, announced it acquired Drone Nerds, LLC, one of the largest distributors and service providers of drones in the United States with more than $100 million in 2024 annual revenue, greater than $55 million in revenue this year through June 30, 2025, and a ten-year record of profitability.

Immediately following the acquisition, XTI closed a $25 million private placement investment by Unusual Machines, Inc., a strategic investor that manufactures and sells drone components and drones across a diversified brand portfolio.

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 $40 million:

• $20 million in cash (paid from XTI's cash on-hand)
• $11.9 million in the form of promissory notes (including approximately $1.6 million in working capital adjustments)
• $9.7 million 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.
  

"The acquisition of Drone Nerds is a foundational step as we advance our strategy to build the most comprehensive portfolio of vertical flight and UAS capabilities in the industry," says Scott Pomeroy, CEO of XTI. "The addition of Drone Nerds significantly expands XTI's scale, recurring revenue base and near-term operating footprint."

"As the largest drone distributor in the United States, Drone Nerds brings deep technical expertise, broad industry reach, and strong alignment with XTI's advanced aviation vision," adds Jeremy Schneiderman, CEO of Drone Nerds. "We're excited about this next chapter as Drone Nerds continues to capture more and higher-margin enterprise business and we grow our influence in autonomous flight, drones-as-as-service, and first person view (FPV) immersive and dynamic drone use cases. We stand ready as an XTI company to support our expanding customer base with our unmatched sector knowledge, experience, dealer network, and service capabilities. We take pride in helping customers select secure, high-performance drone systems and software that improve operational efficiency."

"Drone Nerds has an unprecedented opportunity to define the entire domestic drone landscape over the next few years as the U.S. intensifies its ban on Chinese drone companies," says Allan Evans, CEO of Unusual Machines. "We are excited to be a part of the Drone Nerds - XTI strategy and look forward to further strengthening our years-long relationship with Drone Nerds, and we are demonstrating our confidence in the XTI strategy by our investment as we collectively build the American aerospace ecosystem."

"We believe joining XTI positions Drone Nerds at the center of aviation's next transformation," continues Schneiderman. "Together our solutions are aimed at enabling customers to realize meaningful cost efficiencies, as well as speed and competitive advantages that drones and unmanned flight can deliver across a variety of economic sectors from logistics and emergency response to defense, security, delivery, and energy, agriculture and infrastructure inspection.  We have built a close relationship with the XTI executive team over the last several months and we are excited to support their innovative approach to advancing U.S. drone leadership consistent with the June 6, 2025, White House Executive Order on domestic drone development and the broader Vertical Economy framework."

ThinkEquity acted as the introducing party and exclusive M&A advisor to XTI in connection with the acquisition of Drone Nerds. ThinkEquity also acted as the exclusive placement agent with respect to the $25 million private placement investment by Unusual Machines.

Additional information regarding the transactions described in this press release, including the material terms of the acquisition agreements, will be contained in a Current Report on Form 8-K that XTI intends to file with the SEC. Investors are encouraged to read such information once filed.