Form 8-K

8-K — Unusual Machines, Inc.

Accession: 0001683168-26-003912

Filed: 2026-05-14

Period: 2026-05-14

CIK: 0001956955

SIC: 3663 (RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT)

Item: Results of Operations and Financial Condition

Item: Financial Statements and Exhibits

Documents

8-K — umac_8k.htm (Primary)

EX-99.1 — SHAREHOLDER LETTER DATED MAY 14, 2026 (umac_ex9901.htm)

XML — IDEA: XBRL DOCUMENT (R1.htm)

8-K — FORM 8-K

8-K (Primary)

Filename: umac_8k.htm · Sequence: 1

Unusual Machines Form 8-K

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0001956955

2026-05-14

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities

Exchange Act of 1934

Date of Report (Date of earliest event

reported) May

14, 2026

Unusual Machines, Inc.

(Exact name of registrant as specified in its charter)

Nevada

001-41961

66-0927642

(State or other jurisdiction

(Commission

(IRS Employer

of incorporation)

File Number)

Identification No.)

5728

Major Blvd, Ste #250

Orlando, FL

32819

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including

area code: (844) 893-7663

N/A

(Former name or former address, if changed since

last report.)

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b)

of the Act:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on

Which Registered

Common Stock, $0.01

UMAC

NYSE American

Indicate by check mark whether the registrant

is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the

Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check

mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting

standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On May 14, 2026, Unusual Machines, Inc. (the “Company”)

issued a letter to shareholders announcing its results of operations for the fiscal quarter ended March 31, 2026. A copy of the shareholder

letter is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information contained in this Item 2.02, including

Exhibit 99.1 attached hereto, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the

Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section. Furthermore, the information contained in this

Item 2.02 or Exhibit 99.1 shall not be deemed to be incorporated by reference into any registration statement or other document filed

pursuant to the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial

Statements and Exhibits.

(d) Exhibits

Exhibit No.

Exhibit

99.1

Shareholder Letter dated May 14, 2026

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements

of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto

duly authorized.

Unusual Machines, Inc.

Date: May 14, 2026

By:

/s/ Brian Hoff

Name:

Brian Hoff

Title:

Chief Financial Officer

EX-99.1 — SHAREHOLDER LETTER DATED MAY 14, 2026

EX-99.1

Filename: umac_ex9901.htm · Sequence: 2

Exhibit 99.1

Unusual Machines First Quarter 2026 Shareholder Letter

Conference call today at 4:30 p.m. ET

ORLANDO, FLORIDA / ACCESS Newswire / May 14,

2026 / **Unusual Machines (NYSE American: UMAC) ("Unusual Machines" or the "Company"), a leading provider

of NDAA-compliant drone components, today announced it filed its Form 10-Q with the U.S.

Securities and Exchange Commission for the first quarter ended March 31, 2026 and provided the following letter to its shareholders

from CEO Allan Evans.

Dear Shareholders,

This shareholder letter follows the completion of our first quarter

of 2026.

We continued to successfully execute our growth plan during the quarter.

In the first quarter, we generated $8.1 million in revenue, reflecting

a 296% year-over-year growth compared to the first quarter of 2025 and a 65% quarter-over-quarter growth over the fourth quarter of 2025.

We are profitable and generated over $10 million in net income in the first quarter. Even after excluding unrealized gains from investments,

we generated a net profit of $0.8M. At a very high level, we are doing something unusual - rapid growth without burning cash too quickly.

The financial details reveal a comprehensive growth story in a very

high-demand market. The growth in revenue is, in part, the result of the growth in headcount and capacity from last quarter. In Q4 of

2025, we grew from 38 to 81 employees. This subsequently contributed to the rapid revenue growth in Q1. This capacity growth continued

through the first quarter as we went from 81 to 141 employees. This type of growth naturally has a negative impact on margins, as new

manufacturing employees factor into our production costs and, eventually, into the cost of goods sold. Our gross margins followed this

pattern and decreased to 32.8%, which we expect will recover to about 40% once growth eventually slows down.

Growth also resulted in increased operating costs. Our total operating

expenses for the quarter were approximately $9.9 million, resulting in a GAAP net operating loss of approximately $7.3 million. This includes

non-cash expenses of approximately $4.0 million and other non-recurring expenses of approximately $1.1 million. This brings our operational

net loss for the quarter to approximately $1.5 million. See the discussion of Non-GAAP Financial Measure below. This is the first quarter

where our operational net loss has exceeded $1.0 million since we became a public company. These costs do not worry us, as they reflect

the investment needed to build capacity ahead of revenue generation. Our rapid growth has moved our operating breakeven point from our

previously calculated $30-40 million in annual revenue to a higher level. This choice was made consciously to capture as much market share

as possible during this phase of unprecedented market expansion. We constantly seek to “right-size” the company, and currently,

in our view, we are still much too small.

To facilitate faster growth, several important

developments have happened since the quarter ended. We raised $150 million in a confidentially marketed public offering priced at $17

per share. We then used our strengthened cash position to place approximately $75 million in raw material orders to ensure we have the

inputs necessary to continue delivering to our customers. We also recently announced the acquisition of Upgrade Energy to dramatically

accelerate our battery production plans.

Our capital position allows us to continue to grow as fast as we can

to support the rapidly scaling domestic drone ecosystem, which is creating significant demand for our products.

We want to take this opportunity to provide additional context around

our financial results and the scaling of Unusual Machines as we continue to execute in this growth phase.

Operations Update

We continue with workforce expansion. Headcount grew from 81 employees

at the end of the fourth quarter of 2025 to 141 at the end of the first quarter. As of today, the company has grown to more than 190 employees,

and we are continuing to expand and scale production.

Our Fat Shark headset production facility started to produce U.S.-made

headsets at scale in January. We have seen solid demand for this new product category and continued growth in our ability to manufacture

at scale. This is our first production facility in Orlando that works with optics, and its success will serve as a starting point for

on-shoring the production of additional optical products such as cameras.

Demand is not being driven by a single product or customer. We are

adding shifts and increasing capacity for all of our facilities. Our largest customer in the first quarter of 2026 represented approximately

19% of our total Q1 revenue, and our single best-selling product was approximately 12.7% of our revenue. This mix is a sign of the robust

growth we are seeing across our entire business as we scale.

The drivers for growth can be seen across our first-quarter financial

results. We increased raw material and prepaid inventory from $13.9 million as of December 31, 2025 to $25.8 million as of March 31, 2026.

The conversion of the inventory resulted in rapid sales as our finished inventory value changed very little from $1.1 million as of December

31, 2025 to $1.6 million as of March 31, 2026. We spent money on additional equipment to further expand our motor production, which is

part of the $0.7 million in Capex.

Demand continues to be robust. There are several public indicators

of this demand. In the first quarter, the Drone Dominance program, a $1.1 billion Department

of War (DoW) program, announced the first set of contract awardees. Over half of the selected companies are our customers. That program

continues to run on schedule with Phase 2 dates already set, and the sourcing requirements favor U.S. production of components. The conflict

in Iran has created a market for counter drones (cUAS), which use the same parts that we make for small drones, as exemplified through

a recently announced order with PowerUS. These public indicators

represent a small subset of the expected total demand coming from different drone companies servicing the DoW.

We plan to continue our relentless pace of expansion until we get much

closer to meeting the supply volume needed to satiate the ever-growing demand for domestic drone components.

Cash Flow Management

Responsible cash management is core to our ethos, and I want to highlight

how we balance the costs of operational growth with our cash-management strategy.

We ended the quarter with approximately $222.9 million in cash. The

increase in cash was bolstered by an equity financing of approximately $150 million at $17 per share. Our cash position allows us to invest

aggressively in scaling the company while maintaining financial flexibility and providing a working-capital basis to manage inventory

and material flow.

Cash can be allocated to many different balance sheet categories at

any given time. It can be used to purchase inventory, fund capital equipment, etc. The purpose of these balance sheet activities is to

use the cash to generate a positive return. The best way to measure cash flow for our business is to aggregate these categories and subtract

payables to quickly understand the financial health of our entire business. We call this our working capital, and it is summarized in

Table 3. At the end of Q1 2026, our working capital was approximately $312.7 million. Through all activities across the first quarter

of 2026, we generated an operating cash gain of approximately $4.8 million.

In this same quarter, we recognized a GAAP net income of approximately

$10.3 million. This blended GAAP gain is primarily driven by unrealized gains from our investments of approximately $9.5 million. Reference

Table 2 for additional details related to our operating and non-GAAP financial metrics.

By any metric, we are growing and generating net income. This allows

us to plan and build the company without requiring additional financing or being susceptible to market dynamics associated with regularly

generating cash losses.

Looking Ahead

Our priorities moving forward remain clear.

Scale Manufacturing

We are continuing to scale as quickly as possible. We continue to add

people, shifts, and equipment to all our production facilities. With the pending acquisition of Upgrade Energy, we anticipate adding battery

pack manufacturing in both Orlando and California as the acquisition nears closing. We are also on track to add camera manufacturing in

late 2026. We plan to dramatically increase our motor production capacity in the second half of 2026 with our automated production equipment

and are expanding capacity in other ways prior to that equipment coming online.

Grow Revenue and Manage Margins

As we scale manufacturing, we will need to grow revenue to consume

the additional material purchases or risk scaling ahead of demand and incurring significant losses. We do not believe we will be demand-limited

in the next 18 months. The Drone Dominance program is on time, and Phase 2 is already scheduled.

Counter-drone demand is starting to materialize. The proposed budget for the Department of War is 50% larger than last year’s, and

the allocation to the Defense Autonomous Warfare Group (DAWG), a specialized Pentagon unit, is ballooning to $56B. In addition, the FAA

is moving to enact rules that will enable drone delivery and dramatically expand the domestic drone marketplace in late 2027. Every demand

indicator is growing and appears to still be in the very early stages.

New products, processes, and production facilities will continue to

introduce inefficiencies that will reduce gross margins in the short term. This margin impact is generally the most pronounced in the

quarter after a facility is operational. For instance, our gross margin in Q1 of 2026 was approximately 33%, down from 36% in Q4 of 2025.

I expect production margins to hold steady in Q2 before rebounding as the margin impacts are not realized until after the product is shipped.

Once we get past these initial inefficiencies, we will work to return margins to our 40% target, which may not happen until late 2026

or early 2027.

Drive Toward Cash Flow Positive Operations

Our long-term goal is to build a profitable and sustainable business.

We were cash-flow positive in the first quarter of 2026, but we still incurred a loss from operations. Our next financial goal is for

our operations to be cash flow positive. We are pushing to achieve this by the end of 2026 as revenues increase and margins recover from

the anticipated pressure associated with the inefficiencies that come from the introduction of new operating centers and processes.

Closing Thoughts

2026 has started with a bang. Unusual Machines is firmly in the early

stages of growth, and we are doing it without burning cash too quickly. The demand signals are overwhelming, and we are aggressively pursuing

the emerging market opportunity created by the DoW and the FCC regulatory actions, emphasizing the need for a domestic supply chain.

We continue to expand our team, strengthen our balance sheet, and build

the operational capacity needed to support increasing demand for NDAA-compliant drone components. We also continue to add product categories

such as headsets and batteries and expect to continue expanding operations to meet demand.

We believe the U.S. drone industry is still in its early stages of

development, and the need for secure, domestic supply chains will continue to grow. Our focus remains on building the infrastructure necessary

to support that ecosystem, and we are pursuing this with the expectation that we will not be demand-limited for the next 18 months.

We appreciate the continued support and confidence of our employees,

our customers, and our shareholders.

Sincerely,

Allan Evans

CEO

Unusual Machines

Conference Call and Webcast Details

Participants may dial (888)506-0062 or (973)528-0011 for international

callers. Please use access code 445017. An audio webcast will also be available HERE.

First Quarter 2026 Financial Results

· Revenues totaled approximately $8.1 million for

the three months ended March 31, 2026 as compared to $2.0 million for the three months ended March 31, 2025 which was a 296% increase

for the first quarter year over year.

· Gross margin for the first quarter was approximately

33%, which improved from the prior year, due in part to an increase in enterprise sales, increasing costs related to tariffs, and expanding

certain retail margins. It decreased from the prior quarter as we continue to scale our manufacturing staff, which is included in our

product-related costs.

· Our loss from operations was approximately $7.3

million for the three months ended March 31, 2026, as compared to an operating loss of $3.3 million for the three months ended March 31,

2025. Included in this is non-cash stock compensation expense of $3.9 million and $1.9 million for the three months ended March 31, 2026

and 2025, respectively.

· Interest income was $0.8 million for the three

months ended March 31, 2026 related to interest earned from our cash balance, which increased from our recent common stock offering.

· Unrealized gain from short-term investments was

$9.5 million for the three months ended March 31, 2026, and realized gains from short-term investments were $7.3 million related to investment

gains from our investments made during the quarter. We did not have any unrealized or realized gains in the first quarter of 2025.

· Net income attributable to common shareholders

for the three months ended March 31, 2026 was approximately $10.3 million, or $0.22 per share, as compared to a net loss of approximately

$3.3 million for the three months ended March 31, 2025, or ($0.21) per share. See Table 2 for additional details.

· We had approximately $222.9 million of cash as

of March 31, 2026 as compared to $103.2 million as of December 31, 2025. The increase in cash primarily relates to our common stock offering

completed in March 2026 and cash exercise of warrants in January 2026. See Table 1 for additional details.

For further information concerning our financial

results, see the tables attached to this shareholders’ letter.

About Unusual Machines

Unusual Machines manufactures and sells drone components and drones

across a diversified brand portfolio, which includes Fat Shark, the leader in FPV (first-person view) ultra-low latency video goggles

for drone pilots. The Company also retails small, acrobatic FPV drones and equipment directly to consumers through the curated Rotor Riot

ecommerce store. With a changing regulatory environment, Unusual Machines seeks to be a dominant Tier-1 parts supplier to the fast-growing

multi-billion-dollar U.S. drone industry. According to Fact.MR, the global drone accessories market is currently valued at $17.5 billion

and is set to top $115 billion by 2032. For more information, please visit unusualmachines.com.

Safe Harbor Statement

This shareholder letter contains forward-looking

statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe," "may,"

"estimate," "continue," "anticipate," "intend," "should," "plan," "could,"

"target," "potential," "is likely," "will," "expect" and similar expressions, as they

relate to us, are intended to identify forward-looking statements. These statements include: our ability to meet customers’ demands,

our future gross margins, our future break-even point from operations, our acquisition of Upgrade Energy and its impact, our future expansion

of our operations, and the FAA’s passing of new rules to expand the use of drones domestically. The results expected by some or

all of these forward-looking statements may not occur. Forward-looking statements are neither historical facts nor assurances of future

performance, and are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans

and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements

relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and

many of which are outside of our control. Therefore, you should not rely on any of these forward-looking statements. Factors that affect

our ability to achieve these results include the risks that enough of our customers receive orders under the Drone Dominance program and

in turn place component orders with us, the risks that our inventory buildup will not become obsolete and we can sell such inventory at

reasonable margins, our ability to manage our growth, risks relating to manufacturing bugs or delays, the availability of a satisfactory

labor pool to meet our planned growth, potential supply chain issues, the impact from inflation and its continuing to effect the U.S.

economy, technical or other issues that may affect the FAA’s rule making process including possible litigation, and the Risk Factors

contained in our Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission (the "SEC")

and our Prospectus Supplement filed with the SEC on March 19, 2026. Factors or events that could cause our actual results to differ may

emerge from time to time, and it is not possible for us to predict all of them. Any forward-looking statement made by us herein speaks

only as of the date on which it is made. We undertake no obligation to update any forward-looking statement, whether as a result of new

information, future developments or otherwise, except as may be required by law.

Non-GAAP - Financial Measures

This shareholder letter includes both financial

measures in accordance with Generally Accepted Accounting Principles, or GAAP, as well as a non-GAAP financial measure. Generally, a non-GAAP

financial measure is a numerical measure of a company's performance, financial position or cash flows that either excludes or includes

amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with

GAAP. Non-GAAP financial measures should be viewed as supplemental to, and should not be considered as alternatives to net income (loss),

operating income (loss), and cash flow from operating activities, liquidity or any other financial measures. They may not be indicative

of the historical operating results of the Company nor are they intended to be predictive of potential future results. Investors should

not consider non-GAAP financial measures in isolation or as substitutes for performance measures calculated in accordance with GAAP.

Our management uses and relies on adjusted net

loss, which is a non-GAAP financial measure. We believe that management, analysts, and shareholders benefit from referring to the following

non-GAAP financial measure to evaluate and assess our core operating results from period-to-period after removing the impact of items

that affect comparability. Our management recognizes that the non-GAAP financial measure has inherent limitations because of the excluded

items described below.

We have included in Table 2 a reconciliation of

our non-GAAP financial measure to the most comparable financial measure calculated in accordance with GAAP. We believe that providing

the non-GAAP financial measure, together with reconciliation to GAAP, helps investors make comparisons between the Company and other companies.

In making any comparisons to other companies, investors need to be aware that companies use different non-GAAP measures to evaluate their

financial performance.

Table 1

Cash balance at December 31, 2025

103.2M

Q1 cash financings:

Public offering, net

138.8M

Warrant exercises

3.4M

Short-term investments

12.8M

Interest income

0.8M

Employee stock option exercises

0.1M

Q1 cash spend:

Normal operations

(1.6M)

Working capital changes

(1.8M)

Non-recurring expenses

(1.7M)

Inventory purchases

(12.9M)

Equipment purchases

(0.7M)

Short-term investments

(17.5M)

Cash Balance at March 31, 2026

222.9M

Table 2 (Non-GAAP)

Net income for three months ended March 31, 2026

10.3M

Q1 non-cash income and expenses for the three months ended March 31, 2026:

Unrealized change in short-term investments

(9.5M)

Stock compensation expense

3.9M

Depreciation and amortization

0.1M

Adjusted operating income for non-cash related activity

4.8M

Q1 non-operating and non-recurring expenses for the three months ended March 31, 2026:

Realized gains from short-term investments

(7.3M)

Interest income

(0.8M)

Non-recurring expenses

1.7M

Adjusted EBITDA for the three months ended March 31, 2026

(1.6M)

Table 3

Working Capital Detail

Q1 2026

Q4 2025

Total current assets

$ 315.2M

$ 159.5M

Total current liabilities less operating lease liability

(1.7M)

(2.1M)

Net working capital

$ 313.5M

$ 157.4M

Total financings, net of fees

$ 138.8M

$ 157.8M

Unusual Machines, Inc.

Consolidated Condensed Balance Sheets

March 31,

2026

December 31,

2025

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$ 222,939,674

$ 103,261,397

Short term investments at fair value

48,156,983

39,217,909

Short term investments at cost

12,500,000

–

Accounts receivable

3,128,885

1,564,739

Related party accounts receivable

468,136

214,684

Inventories

13,827,189

5,316,648

Prepaid inventory

13,566,078

9,748,483

Other current assets

618,626

190,622

Total current assets

315,205,571

159,511,482

Non-current assets:

Property and equipment, net

2,925,948

2,233,891

Operating lease right-of-use assets

3,273,433

2,607,256

Other assets

198,734

197,785

Goodwill

15,596,105

Intangible assets, net

2,503,262

2,561,895

Total non-current assets

24,497,482

23,196,932

Total assets

$ 339,703,053

$ 182,708,414

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable and accrued expenses

$ 1,071,486

$ 1,506,793

Deferred revenue

672,568

638,125

Operating lease liability

714,139

456,429

Total current liabilities

2,458,193

2,601,347

Long-term liabilities

Deferred tax liability

146,772

Operating lease liability – long term

2,613,688

2,173,626

Contingent consideration

2,847,000

Total current liabilities

5,607,460

5,167,398

Total liabilities

8,065,653

7,768,745

Commitments and contingencies (See note 12)

Stockholders’ equity:

Common stock - $0.01 par value, 500,000,000 authorized and 47,793,923 and 37,759,911 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

477,938

377,596

Additional paid in capital

375,960,699

229,665,735

Accumulated deficit

(44,824,137 )

(55,107,131 )

Accumulated other comprehensive income

22,901

3,470

Total stockholders’ equity

331,637,400

174,939,670

Total liabilities and stockholders’ equity

$ 339,703,053

$ 182,708,414

Unusual Machines, Inc.

Consolidated Condensed Statement of Operations

and Comprehensive Income (loss)

For the Three Months Ended March 31, 2026 and

2025

(Unaudited)

Three Months Ended March 31,

2026

2025

Sales

$ 8,095,836

$ 2,042,300

Cost of goods sold

5,441,729

1,545,493

Gross profit

2,654,107

496,807

Operating expenses:

Operations

1,948,899

302,602

Research and development

91,143

7,903

Selling and marketing

580,039

207,616

General and administrative

7,228,200

3,225,904

Depreciation and amortization

64,813

20,593

Total operating expenses

9,913,094

3,764,618

Loss from operations

(7,258,987 )

(3,267,811 )

Other income and (expense):

Interest income

792,078

1,532

Unrealized gain from investments

9,492,076

–

Realized gain from investments

7,264,743

–

Loss from foreign currency transactions

(6,548 )

–

Interest expense

(368 )

–

Total other income and (expense), net

17,541,981

1,532

Net income (loss) before income tax

10,282,994

(3,266,279 )

Income tax benefit (expense)

–

Net income (loss)

$ 10,282,994

$ (3,266,279 )

STATEMENT OF COMPREHENSIVE INCOME

Net income (loss)

10,282,994

(3,266,279 )

Foreign currency translation adjustment

19,431

–

Comprehensive income (loss)

$ 10,302,425

$ (3,266,279 )

Net loss per share

Basic

$ 0.22

$ (0.21 )

Diluted

$ 0.21

$ (0.21 )

Weighted average common shares outstanding

Basic

46,708,842

15,902,473

Diluted

48,134,348

15,902,473

Unusual Machines, Inc.

Consolidated Condensed Statement of Changes

in Stockholders’ Equity

For the Three Months Ended March 31, 2026 and

2025

(Unaudited)

Common Stock

Additional Paid-In

Accumulated

Accumulated Other Comprehensive

Total Stockholders’

Value

Capital

Deficit

Income

Equity

Balance, December 31, 2024

15,122,018

151,221

50,580,235

(35,913,514

)

–

14,817,942

Issuance of common shares, equity incentive plan

483,546

4,835

(4,835

)

–

Cash exercise of warrants

1,224,606

12,246

2,424,720

–

2,436,966

Stock compensation expense - vested stock

–

1,883,433

–

1,883,433

Stock compensation expense

–

22,940

–

22,940

Net loss

–

(3,266,279

)

–

(3,266,279

)

Balance, March 31, 2025

16,830,170

168,302

54,906,493

(39,179,793

)

–

15,895,002

Balance, December 31, 2025

37,759,911

377,596

229,665,736

(55,107,131

)

3,470

174,939,670

Issuance of common shares, employees, officers, and directors

745,883

7,460

(7,460

)

–

Issuance of common shares, option exercises

74,600

747

259,587

–

260,334

Issuance of common shares, consulting services

40,000

400

(400

)

–

Issuance of common shares, confidentially marketed public offering

8,823,529

88,235

138,711,758

–

138,799,993

Issuance of common shares, warrant exercise

350,000

3,500

3,391,500

–

3,395,000

Stock compensation expense - options

–

291,412

–

291,412

Stock compensation expense - vested stock

–

3,648,567

–

3,648,567

Net income

–

10,282,994

–

10,282,994

Foreign currency translation

–

19,431

Balance, March 31, 2026

47,793,923

477,938

375,960,699

(44,824,137

)

22,901

331,637,400

Unusual Machines, Inc.

Consolidated Condensed Statement of Cash Flows

For the Three Months Ended March 31, 2026 and

2025

(Unaudited)

Three Months Ended March 31,

2026

2025

Cash flows from operating activities:

Net income (loss)

$ 10,282,994

$ (3,266,279 )

Depreciation and amortization

64,813

20,593

Share-based compensation expense

3,939,979

1,906,373

Unrealized gain on short term investments

(9,492,076 )

–

Realized gain on short term investments

(7,264,743 )

–

Change in assets and liabilities:

Accounts receivable

(1,817,598 )

15,625

Inventory

(8,510,541 )

121,213

Prepaid inventory

(3,817,595 )

69,449

Other assets

(428,004 )

(173,647 )

Right of use asset

(667,125 )

17,264

Accounts payable and accrued expenses

(435,307 )

191,822

Operating lease liabilities

697,772

(16,095 )

Deferred revenue and other current liabilities

34,443

(79,946 )

Net cash used in operating activities

(17,412,987 )

(1,193,628 )

Cash flows from investing activities

Purchase of short term investments

(17,500,000 )

–

Proceeds from sale of short-term investments

12,814,743

–

Purchase of property and equipment

(698,237 )

–

Net cash used in investing activities

(5,383,494 )

–

Cash flows from financing activities:

Gross proceeds from issuance of common shares, public offering

149,999,993

–

Proceeds from option exercises

260,334

–

Proceeds from issuance of common shares, warrant exercises

3,395,000

2,436,966

Common share issuance offering costs

(11,200,000 )

–

Net cash provided by financing activities

142,455,327

2,436,966

Net increase in cash and cash equivalents

119,658,846

1,243,338

Effect of exchange rates changes on cash

19,431

–

Cash and cash equivalents, beginning of period

103,261,397

3,757,323

Cash and cash equivalents, end of period

$ 222,939,674

$ 5,000,661

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