Unusual Machines, Inc. 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	Quarterly REPORT pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2026

Or

☐	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _____________ to _____________

Commission File No. 001-41961

Unusual Machines, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Nevada		66-0927642
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

5728 Major Blvd

Suite 250

Orlando, FL

32819

Address of Principal Executive Offices

Zip Code

(720) 383-8983

(Registrant’s telephone number, including area code)

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, par value $0.01 per share	UMAC	NYSE American

Indicate by check mark whether the registrant: (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☐	Accelerated Filer ☐
Non-accelerated Filer ☒	Smaller Reporting Company ☒
	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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12(b)-2 of the Exchange Act). Yes ☐ No ☒

As of August 6, 2026, 49,956,505 shares of the registrant’s common stock, $0.01 par value per share, were outstanding.

UNUSUAL MACHINES, INC.

2026 QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

		Page No.
PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	4
	Unaudited Consolidated Condensed Balance Sheets	4
	Unaudited Consolidated Condensed Statements of Operations and Comprehensive Income (Loss)	5
	Unaudited Consolidated Condensed Statements of Changes in Shareholders’ Equity	6
	Unaudited Consolidated Condensed Statements of Cash Flows	7
	Notes to Unaudited Consolidated Condensed Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	36
	Signatures	37

Unless we state otherwise or the context otherwise requires, the terms “Unusual Machines,” “we,” “us,” “our” and the “Company” refer to Unusual Machines, Inc., a Nevada corporation.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or Quarterly Report, contains forward-looking statements that involve risks and uncertainties. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expects”, “intends”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”, “continue” or the negative of these terms or other comparable terminology.

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. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include the factors set forth in our Prospectus Supplement dated March 19, 2026 and Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025.

These forward-looking statements speak only as of the date of this Form 10-Q and are subject to business and economic risks. We do not undertake any obligation to update or revise the forward-looking statements to reflect events that occur or circumstances that exist after the date on which such statements were made, except to the extent required by law.

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements

Unusual Machines, Inc.

Consolidated Condensed Balance Sheets


	June 30, 2026 (Unaudited)			December 31, 2025
ASSETS
Current assets:
Cash and cash equivalents	$	229,598,776		$	103,261,397
Short-term investments at fair value		39,273,449			39,214,909
Short-term investment at cost		47,500,000			–
Accounts receivable		9,333,235			1,564,739
Related party accounts receivable		1,278,160			214,684
Inventories		21,914,332			5,316,648
Prepaid inventory		20,543,732			9,748,483
Other current assets		1,134,261			190,622
Total current assets		370,575,945			159,511,482

Non-current assets:
Property and equipment, net		2,711,375			2,233,891
Operating lease right-of-use assets		3,090,057			2,607,256
Other assets		3,067,056			197,785
Goodwill		15,596,105			15,596,105
Intangible assets, net		2,452,610			2,561,895
Total non-current assets		26,917,203			23,196,932

Total assets	$	397,493,148		$	182,708,414

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses	$	2,863,569		$	1,506,793
Deferred revenue		286,056			638,125
Operating lease liability		735,521			456,429
Contingent consideration		3,000,000			2,847,000
Total current liabilities		6,885,146			5,448,347

Non-current liabilities
Deferred tax liability		146,772			146,772
Operating lease liability – less current portion		2,420,493			2,173,626
Total non-current liabilities		2,567,265			2,320,398
Total liabilities		9,452,411			7,768,745

Commitments and contingencies (See note 12)		–			–

Stockholders’ equity:
Common stock - $0.01 par value, 500,000,000 authorized and 49,956,505 and 37,759,911 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively		499,568			377,596
Additional paid in capital		440,110,645			229,665,735
Accumulated deficit		(52,607,690	)		(55,107,131	)
Accumulated other comprehensive income		38,214			3,470
Total stockholders’ equity		388,040,737			174,939,670

Total liabilities and stockholders’ equity	$	397,493,148		$	182,708,414

See accompanying unaudited notes to the consolidated condensed financial statements.

Unusual Machines, Inc.

Consolidated Condensed Statements of Operations and Comprehensive Income (Loss)

For the Three and Six Months Ended June 30, 2026 and 2025

(Unaudited)


	Three months ended June 30,						Six months ended June 30,
	2026			2025			2026			2025

Revenues	$	16,722,467		$	2,123,970		$	24,818,304		$	4,166,270

Cost of goods sold		10,920,334			1,329,291			16,362,063			2,874,784

Gross Margin		5,802,134			794,679			8,456,241			1,291,486

Operating Expenses
Operations		1,540,919			404,277			3,367,620			706,879
Research and development		430,759			62,731			644,101			70,633
Sales and marketing		790,012			302,358			1,370,051			509,975
General and administrative		10,799,261			7,195,193			18,027,462			10,421,097
Depreciation and amortization		75,324			20,593			140,137			41,186
Total operating expenses		13,636,276			7,985,152			23,549,371			11,749,770

Loss from operations		(7,834,143	)		(7,190,473	)		(15,093,130	)		(10,458,284	)

Other income and (expense)
Interest income		1,820,162			225,734			2,612,240			227,266
Unrealized gain (loss) from investments		(3,883,535	)		–			5,608,541			–
Realized gain from investments		2,267,931			–			9,532,673			–
Change in contingent consideration for Rotor Lab		(153,000	)		–			(153,000	)		–
Loss from foreign currency transactions		(687	)		–			(7,235	)		–
Interest expense		(281	)		–			(648	)		–
Other income, net		50,590			225,734			17,592,571			227,266

Net income (loss)	$	(7,783,553	)	$	(6,964,739	)	$	2,499,441		$	(10,231,018	)

STATEMENT OF COMPREHENSIVE INCOME (LOSS)

Net income (loss)		(7,783,553	)		(6,964,739	)		2,499,441			(10,231,018	)

Foreign currency translation adjustment		15,314			–			34,744			–

Comprehensive income (loss)	$	(7,768,239	)	$	(6,964,739	)	$	2,534,185		$	(10,231,018	)

Net income (loss) per share
Basic	$	(0.16	)	$	(0.32	)	$	0.06		$	(0.54	)
Diluted	$	(0.16	)	$	(0.32	)	$	0.06		$	(0.54	)

Weighted average common shares outstanding
Basic		48,611,102			21,771,954			44,125,630			18,853,428
Diluted		48,611,102			21,771,954			44,775,513			18,853,428

See accompanying unaudited notes to the consolidated condensed financial statements.

Unusual Machines, Inc.

Consolidated Condensed Statements of Changes in Stockholders’ Equity

For the Three and Six Months Ended June 30, 2026 and 2025

(Unaudited)


	Common Stock				Additional Paid-In			Accumulated			Accumulated Other Comprehensive		Total Stockholders’
	Shares		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

Issuance of common shares, employees, officers, and directors		208,336		2,082		(2,082	)		–			–		–
Issuance of common shares, option exercises		94,650		947		366,923			–			–		367,870
Issuance of common shares, consulting services		4,630		46		(46	)		–			–		–
Issuance of common shares, advisory board		150,000		1,500		(1,500	)		–			–		–
Issuance of common shares, public offering		8,000,000		80,000		36,416,000			–			–		36,496,000
Stock compensation expense - options		–		–		576,831			–			–		576,831
Stock compensation expense - vested stock		–		–		4,936,497			–			–		4,936,497
Net loss		–		–		–			(6,964,739	)		–		(6,964,739	)

Balance, June 30, 2025		25,287,786	$	252,877	$	97,199,116		$	(46,144,532	)	$	–	$	51,307,461



Balance, December 31, 2025		37,759,911	$	377,596	$	229,665,734		$	(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, net of offering costs		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		19,431

Balance, March 31, 2026		47,793,923	$	477,938	$	375,960,697		$	(44,824,137	)	$	22,901	$	331,637,400

Issuance of common shares, employees, officers, and directors		8,352		83		(83	)		–			–		–
Issuance of common shares, option exercises		46,230		467		326,784			–			–		327,251
Issuance of common shares, advisory board		108,000		1,080		(1,080	)		–			–		–
Issuance of common shares, at-the-market offering, net of issuance costs		2,000,000		20,000		58,178,764			–			–		58,198,764
Stock compensation expense - options		–		–		2,178,041			–			–		2,178,041
Stock compensation expense - vested stock		–		–		3,467,522			–			–		3,467,522
Net loss		–		–		–			(7,783,554	)		–		(7,783,553	)
Foreign Currency Translation		–		–		–			–			15,314		15,314

Balance, June 30, 2026		49,956,505	$	499,568	$	440,110,645		$	(52,607,690	)	$	38,214	$	388,040,737