What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-03-27 compared with 2024-03-22 · 477 added, 417 removed, 315 unchanged (74% of the section changed)

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information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized

and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms because of a material

weakness in the Company’s internal control over financial reporting.

Specifically, the Company did not maintain effective controls,

segregation of duties, and procedures to support the identification of, accounting for, and the evaluation and disclosure of certain

transactions, as limited individuals, either the Principal Executive Officer or Principal Financial Officer, initiates all transactions

and they also review, evaluate, and approve these same transactions.

and reported within the time periods specified in the SEC’s rules and forms because of a material weakness in the Company’s

internal control over financial reporting as noted below.

Management’s Report on Internal Control

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control over financial reporting includes those policies and procedures that:

to the maintenance of records that, in reasonable detail, accurately and fairly reflect the

transactions and dispositions of our assets;

reasonable assurance that transactions are recorded as necessary to permit preparation of

financial statements in accordance with generally accepted accounting principles, and that

our receipts and expenditures are being made only in accordance with authorizations of our

management and directors;

reasonable assurance regarding prevention or timely detection of unauthorized acquisition,

use or disposition of our assets that could have a material effect on the financial statements.

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors;

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal

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with policies or procedures may deteriorate.

Our management assessed the effectiveness of

our internal control over financial reporting based on the parameters set forth above and has concluded that as of December 31, 2023,

our internal control over financial reporting was not effective to provide reasonable assurance regarding the reliability of financial

reporting and the preparation of financial statements for external purposes in accordance with U.S.

generally accepted accounting principles

(“US GAAP”) as a result of the following material weaknesses:

Company does not have sufficient segregation of duties within accounting functions.

Company does not have written documentation of our internal controls policies and procedures.

substantial portion of the Company’s financial reporting is carried out by an outside

accounting firm.

Company’s human resources, processes and systems are not sufficient to enable the production

of timely and accurate financial statements in accordance with US GAAP.

We plan to rectify these weaknesses by establishing

written policies and procedures for our internal control of financial reporting and hiring additional accounting personnel at such time

as we raise sufficient capital to do so.

Changes In Controls Over Financial Reporting

There have been no changes in our internal control

over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the year ended December 31, 2023 that

have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Our management assessed the effectiveness of our

internal control over financial reporting based on the parameters set forth above and has concluded that as of December 31, 2024, our

internal control over financial reporting was not effective to provide reasonable assurance regarding the reliability of financial reporting

and the preparation of financial statements for external purposes in accordance with U.S.

generally accepted accounting principles (“US

GAAP”) as a result of the following material weaknesses:

The Company does not have sufficient segregation of duties within accounting functions.

The Company does not have written documentation of our internal controls policies and procedures.

While the Company has implemented and operating

effectively with internal controls, we have not yet documented and tested our internal control plan.

We plan to rectify these weaknesses

by establishing a control framework including a risk assessment, written policies and procedures for our internal control of financial

reporting and hiring additional accounting personnel at such time as we raise sufficient capital to do so.

In Controls Over Financial Reporting

During the year ended December 31, 2024, the Company

continued to strengthen its internal controls including the implementation of NetSuite financials for its financial and transaction reporting.

This includes certain segregation of duties including the creation of purchase orders by our purchasing team that is approved in accordance

with our authorization matrix, the receipt of inventory in NetSuite by our operations team in Orlando, FL, and dual approvals of all outgoing

cash payments.

As the implementation of NetSuite occurred, we experienced changes to our processes and procedures which in turn, resulted

in changes to our internal control over financial reporting.

We expect NetSuite to strengthen our internal financial controls.

will continue to evaluate and monitor our internal controls as processes and procedures in each of the affected areas evolve and plan

to document our internal control framework and related activities.

than as discussed above, there have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of

the Exchange Act) that occurred during the year ended December 31, 2024 that have materially affected, or are reasonably likely to materially

affect, our internal controls over financial reporting.

Other Information.

During the quarter

ended December 31, 2023, no director or officer of the Company adopted

or terminated a “Rule 10b5-1

trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation

During the fourth quarter ended December 31, 2024,

none of our directors and officers (as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended, (the “Exchange

Act”)) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,”

as those terms are defined in Item 408 of Regulation S-K, except as described in the table below:

Name and Title

Applicable Date

Duration of Trade Arrangements

10b5-1 Trading Arrangement?

Aggregate Number of Securities Subject to Trading Arrangement

Chief Executive Officer and Director

December 13, 2024

May 2025 through December 2025

Up to 30,000 shares of Common Stock from May vesting for tax purposes

Chief Executive Officer and Director

December 13, 2024

August 2025 through December 2025

Up to 15,000 shares of Common Stock from August vesting for tax purposes

Chief Executive Officer and Director

December 13, 2024

November 2025 through December 2025

Up to 15,000 shares of Common Stock from November vesting for tax purposes

Chief Financial Officer

December 13, 2024

April 2025 through December 2025

Up to 83,775 shares of Common Stock for tax purposes

Chief Financial Officer

December 13, 2024

May 2025 through December 2025

Up to 17,500 shares of Common Stock from May vesting for tax purposes

Chief Financial Officer

December 13, 2024

August 2025 through December 2025

Up to 8,750 shares of Common Stock from August vesting for tax purposes

Chief Financial Officer

December 13, 2024

November 2025 through December 2025

Up to 8,750 shares of Common Stock from November vesting for tax purposes

Andrew Camden

Chief Operating Officer

December 13, 2024

May 2025 through December 2025

Up to 17,500 shares of Common Stock from May vesting for tax purposes

Andrew Camden

Chief Operating Officer

December 13, 2024

August 2025 through December 2025

Up to 8,750 shares of Common Stock from August vesting for tax purposes

Andrew Camden

Chief Operating Officer

December 13, 2024

November 2025 through December 2025

Up to 8,750 shares of Common Stock from November vesting for tax purposes

*Denotes whether the trading plan is intended,

when adopted, to satisfy the affirmative defense of Rule 10b5-1(c).

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

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Prior to becoming our Chief Executive Officer, Dr.

Evans was the Chief Operating Officer of Red Cat from January 2021 to November 2023 and was the Chief Executive Officer of Fat Shark.

As part of his compensation package with Red Cat, Dr.

Evans beneficially owns 1,443,395 shares of common stock and 875,000 unvested options

Evans is a serial entrepreneur with a history of founding and leading technological innovation.

He has extensive experience

in overseeing different emerging technologies.

was the Chief Operating Officer of Red Cat from January 2021 to November 2023 and was the Chief Executive Officer of Fat Shark.

is a serial entrepreneur with a history of founding and leading technological innovation.

He has extensive experience in overseeing different

emerging technologies.

From August 2017 to October 2020, Dr.

Evans served as a board member for Ballast Technologies,

a company that specialized in technology for location-based entertainment.

In November 2012, he co-founded Avegant, a technology company

focused on developing next generation display technology to enable previously impossible augmented reality experiences.

He led design,

development, and initial production of the Glyph head mounted display and oversaw technology research and patent strategy while serving

as Chief Technology Officer of Avegant until 2016.

Evans has 47 pending or issued patents that cover a range of technologies from

implantable medical devices to mixed reality headsets.

Academically, his work has an h-index of 15, an i-index of 28, and has been cited

in more than 1,000 publications.

He has extensive experience with new technologies, engineering, business development, and corporate

strategy, and his expertise in these areas strengthens the Company’s collective knowledge and capabilities.

Evans served as a board member for Ballast Technologies, a company that specialized

in technology for location-based entertainment.

In November 2012, he co-founded Avegant, a technology company focused on developing next

generation display technology to enable previously impossible augmented reality experiences.

He led design, development, and initial production

of the Glyph head mounted display and oversaw technology research and patent strategy while serving as Chief Technology Officer of Avegant

Evans has 47 pending or issued patents that cover a range of technologies from implantable medical devices to mixed reality

Academically, his work has an h-index of 15, an i-index of 28, and has been cited in more than 1,000 publications.

He has extensive

experience with new technologies, engineering, business development, and corporate strategy, and his expertise in these areas strengthens

the Company’s collective knowledge and capabilities.

Evans’ management and public company

experience, his experience in the drone business and his role as President and Chief Executive Officer of the Company, led to his appointment

as a director.

experience, his experience in the drone business and his role as Chief Executive Officer of the Company, led to his appointment as a director.

Brian Hoff, Chief Financial Officer

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company focused on audio media, from April 2021 to October 2022.

He served as Vice President and Controller at STACK Infrastructure,

a digital infrastructure company, from October 2019 to April 2021, and as Controller at Coalfire, a cybersecurity company, from November

He served as Vice President and Controller at STACK Infrastructure, a

digital infrastructure company, from October 2019 to April 2021, and as Controller at Coalfire, a cybersecurity company, from November

2011 until October 2019.

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the Company since August 2022.

Colón has been the owner of Cinmarc & Associates LLC, a public housing consulting firm, since

2018 and has served as its President since August 2021.

Colón has also been the owner/operator Café de La Plaza, a restaurant

located in Palmas del Mar, Puerto Rico, since 2009.

Colón has been the owner of Cinmarc & Associates LLC, a public housing consulting firm,

since 2018 and has served as its President since August 2021.

Colón has also been the owner/operator Café de La Plaza,

a restaurant located in Palmas del Mar, Puerto Rico, since 2009.

From 2019 to 2021, Ms.

Colón served as an investor relations specialist at OptimizeRX,

a medical technology company.

Colón’s experience as an entrepreneur and her marketing and investor relations experience

led to her appointment as a director.

Colón served as an investor relations specialist

at OptimizeRX, a medical technology company.

Colón’s experience as an entrepreneur and her marketing and investor relations

experience led to her appointment as a director.

Colon is also a lawyer in Puerto Rico and Florida.

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Since January 2016, Mr.

Rich has served as the Executive

Director of the New York City Board of Education Retirement System.

Rich also served as a member of the Investor Advisory Group of

the PCAOB for a term from June 1, 2022 to December 31, 2023.

Rich has served as the Executive Director

of the New York City Board of Education Retirement System.

Rich also serves as a member of the Investor Advisory Group of the PCAOB

for a term from June 1, 2022 to December 31, 2026.

From November 2012 to January 2016, Mr.

Rich served as the Chief of Negotiations

and Restructuring for the Pension Benefit Guaranty Corporation (a United States Government Agency).

Rich was selected as a director

for his 40 years of experience in the financial sector and his experience serving on the audit committees of public companies.

Rich served as the Chief of Negotiations and

Restructuring for the Pension Benefit Guaranty Corporation (a United States Government Agency).

Rich was selected as a director for

his 40 years of experience in the financial sector and his experience serving on the audit committees of public companies.

Jeffrey Thompson, Director

Thompson has served as a director of the

Company since inception in 2019.

Thompson has served as a director of the Company

since inception in 2019.

He served as the Company’s principal executive officer from inception until April 2022.

has been President and Chief Executive Officer of Red Cat since May 15, 2019.

Thompson was a director of Panacea Life Sciences Holdings,

(OTCQB:PLSH), a producer and marketer of products made from industrial hemp (CBD), from January 2019 until April 2020.

Thompson founded Red Cat Propware Inc., a provider of cloud-based analytics, storage, and services for drone aircraft, and served

as its Chief Executive Officer until May 15, 2019 when it was acquired by Red Cat.

Thompson’s management and public company

experience, his experience in the drone business and his role as President and Chief Executive Officer of Red Cat, led to his appointment

as a director.

been President and Chief Executive Officer of Red Cat since May 15, 2019.

Thompson founded Red Cat Propware Inc., a provider

of cloud-based analytics, storage, and services for drone aircraft, and served as its Chief Executive Officer until May 15, 2019 when

it was acquired by Red Cat.

Thompson’s management and public company experience, his experience in the drone business and his

role as President and Chief Executive Officer of Red Cat, led to his appointment as a director.

Composition of our Board of Directors

Our Board of Directors currently consists of

five members.

Our Board of Directors currently consists of five

Our directors hold office until their successors have been elected and qualified or until the earlier of their death, resignation

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determined that, under the NYSE Listing Rules, Dr.

Evans is not an independent director because he is the Chief Executive Officer of

Evans is not an independent director because he is the Chief Executive Officer of the

It has also been determined that Mr.

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Our Board has determined that Mr.

Rich, and Ms.

Colón are independent under the NYSE Listing Rules’ independence standards for Audit Committee members.

Board has also determined that they are independent under the NYSE Listing Rules independence standards for Compensation Committee members

and for Governance and Nominating committee members.

has also determined that they are independent under the NYSE Listing Rules independence standards for Compensation Committee members and

for Governance and Nominating committee members.

Committees of the Board of Directors

Audit Committee

The Audit Committee

currently consists of Mr.

The Audit Committee currently

consists of Mr.

Rich (Chair), Mr.

Lowry, and Ms.

Each member of the Audit Committee is an independent director

as defined by the rules of the SEC and NYSE American.

The Audit Committee has the sole authority and responsibility to select, evaluate

and engage independent auditors for the Company.

The Audit Committee reviews with the auditors and with the Company’s financial

management all matters relating to the annual audit of the Company.

The Audit Committee

monitors the integrity of our financial statements, monitors the independent registered public accounting firm’s qualifications

and independence, monitors the performance of our internal audit function and the auditors, and monitors our compliance with legal and

regulatory requirements.

The Audit Committee also meets with our auditors to review the results of their audit and review of our annual

and interim financial statements.

The Audit Committee

plans to meet at least on a quarterly basis to discuss with management the annual audited financial statements and quarterly financial

statements and meets from time to time to discuss general corporate matters.

Each member of the Audit Committee is an independent director as defined

by the rules of the SEC and NYSE American.

The Audit Committee has the sole authority and responsibility to select, evaluate and engage

independent auditors for the Company.

The Audit Committee reviews with the auditors and with the Company’s financial management

all matters relating to the annual audit of the Company.

The Audit Committee monitors

the integrity of our financial statements, monitors the independent registered public accounting firm’s qualifications and independence,

monitors the performance of our internal audit function and the auditors, and monitors our compliance with legal and regulatory requirements.

The Audit Committee also meets with our auditors to review the results of their audit and review of our annual and interim financial statements.

The Audit Committee plans

to meet at least on a quarterly basis to discuss with management the annual audited financial statements and quarterly financial statements

and meets from time to time to discuss general corporate matters.

Audit Committee Financial

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Compensation Committee reviews, recommends and approves salaries and other compensation of the Company’s executive officers, and

administers the Company’s Equity Incentive Plan (including reviewing, recommending and approving stock option and other equity

incentive grants to executive officers).

The Compensation Committee

will meet in executive session to determine the compensation of the Chief Executive Officer of the Company.

In determining the amount,

form, and terms of such compensation, the Committee will consider the annual performance evaluation of the Chief Executive Officer conducted

by the Board in light of company goals and objectives relevant to Chief Executive Officer compensation, competitive market data pertaining

to Chief Executive Officer compensation at comparable companies, and such other factors as it deems relevant, and is guided by, and seeks

to promote, the best interests of the Company and its shareholders.

administers the Company’s Equity Incentive Plan (including reviewing, recommending and approving stock option and other equity incentive

grants to executive officers).

In addition, subject

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The Compensation Committee

may, in its sole discretion and at the Company’s cost, retain or obtain the advice of a compensation consultant, legal counsel

or other adviser.

The Compensation Committee is directly responsible for the appointment, compensation and oversight of the work of any

compensation consultant, legal counsel and other adviser retained by the committee.

may, in its sole discretion and at the Company’s cost, retain or obtain the advice of a compensation consultant, legal counsel or

other adviser.

The Compensation Committee is directly responsible for the appointment, compensation and oversight of the work of any compensation

consultant, legal counsel and other adviser retained by the committee.

Corporate Governance

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Lowry, and Mr.

Rich, each of

whom meets the independence requirements of all other applicable laws, rules and regulations governing director independence, as determined

of whom meets the independence requirements of all other applicable laws, rules and regulations governing director independence, as determined

by the Board.

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and oversees the evaluation of the Board and management.

It is authorized to

consider and recruit candidates to fill positions on the Board, including as a result of the removal, resignation or retirement of any

director, an increase in the size of the Board or otherwise.

The Nominating Committee has the authority to conduct, subject to applicable

law, any and all inquiries into the background and qualifications of any candidate for the Board and such candidate’s compliance

with the independence and other qualification requirements established by the Nominating Committee.

It is authorized to consider

and recruit candidates to fill positions on the Board, including as a result of the removal, resignation or retirement of any director,

an increase in the size of the Board or otherwise.

The Nominating Committee has the authority to conduct, subject to applicable law, any

and all inquiries into the background and qualifications of any candidate for the Board and such candidate’s compliance with the

independence and other qualification requirements established by the Nominating Committee.

In selecting and recommending

candidates for election to the Board or appointment to any committee of the Board, the Nominating Committee does not believe that it

is appropriate to select nominees through mechanical application of specified criteria.

Rather, the Nominating Committee shall consider

such factors at it deems appropriate, including, without limitation, the following:

candidates for election to the Board or appointment to any committee of the Board, the Nominating Committee does not believe that it is

appropriate to select nominees through mechanical application of specified criteria.

Rather, the Nominating Committee shall consider such

factors at it deems appropriate, including, without limitation, the following:

personal and professional integrity, ethics and values;

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role, the Nominating Committee is empowered to investigate any matter brought to its attention.

Board Diversity

While we do not have

a formal policy on diversity, the Board considers diversity to include race, ethnicity, gender as well as the skill set, background,

reputation, type and length of business experience of the Board members as well as a particular nominee’s contributions to that

The Board believes that diversity brings a variety of ideas, judgments and considerations that benefit the Company and its shareholders.

Although there are many other factors, the Board seeks individuals with experience on operating and growing businesses.

Board Leadership

Board Leadership Structure

Allan Evans serves as

the Chairman of the Board and actively interfaces with management, the Board and counsel regularly.

We believe that Mr.

We believe that Dr.

experience as an entrepreneur and Chief Executive Officer of a drone company will help the Company with the challenges faced by us at

this stage – closing the acquisition of Fat Shark and Rotor Riot and this Offering as well as implementing our business and marketing

plans, integrating the acquisitions, continuing and managing our growth.

We believe that Mr.

Thompson and the other members

of the Board will assist the Company’s management with both the operational aspects as well as the strategic aspects of our business.

this stage as well as implementing our business and marketing plans, integrating acquisitions, continuing and managing our growth.

believe that Dr.

Thompson and the other members of the Board will assist the Company’s management with both the operational

aspects as well as the strategic aspects of our business.

Board Risk Oversight

The Company’s

risk management function is overseen by the Board.

The Company’s management keeps the Board apprised of material risks and provides

its directors access to all information necessary for them to understand and evaluate how these risks interrelate, how they affect us,

and how management addresses those risks.

Allan Evans, Chairman of the Board, works closely together with the other members of the Board

when material risks are identified on how to best address such risks.

If the identified risk poses an actual or potential conflict with

management, the Company’s independent directors may conduct the assessment.

Presently, the primary risks affecting us are our liquidity

and the lack of revenue.

The Company’s risk

management function is overseen by the Board.

The Company’s management keeps the Board apprised of material risks and provides its

directors access to all information necessary for them to understand and evaluate how these risks interrelate, how they affect us, and

how management addresses those risks.

Allan Evans, Chairman of the Board, works closely together with the other members of the Board when

material risks are identified on how to best address such risks.

If the identified risk poses an actual or potential conflict with management,

the Company’s independent directors may conduct the assessment.

Presently, the primary risks affecting us are our liquidity and

continued revenue growth to obtain positive cash flow.

Family Relationships

There are no family

relationships among any of our officers or directors.

There are no family relationships

among any of our officers or directors.

Involvement in Legal

We are not aware of

any of our directors or officers being involved in any legal proceedings in the past 10 years relating to any matters in bankruptcy,

insolvency, criminal proceedings (other than traffic and other minor offenses) or being subject to any of the items set forth under Item

401(f) of Regulation S-K of the SEC.

We are not aware of any

of our directors or officers being involved in any legal proceedings in the past 10 years relating to any matters in bankruptcy, insolvency,

criminal proceedings (other than traffic and other minor offenses) or being subject to any of the items set forth under Item 401(f) of

Regulation S-K of the SEC.

Code of Ethics

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The Code of Ethics provides written standards that we believe are reasonably designed to deter wrongdoing and promote honest and ethical

conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships,

full, fair, accurate, timely and understandable disclosure and compliance with laws, rules and regulations and the prompt reporting of

illegal or unethical behavior, and accountability for adherence to the Code of Ethics.

We will provide a copy, without charge, to

anyone that requests a copy of our Code of Ethics in writing by contacting 151 Calle De San Francisco, Ste 200 PMB 2106, San Juan, Puerto

Rico, 00901-1607, Attention:

Corporate Secretary.

conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, full,

fair, accurate, timely and understandable disclosure and compliance with laws, rules and regulations and the prompt reporting of illegal

or unethical behavior, and accountability for adherence to the Code of Ethics.

We will provide a copy, without charge, to anyone

that requests a copy of our Code of Ethics in writing by contacting 4677 LB McLeod Road, Suite J, Orlando, FL 32811, Attention:

Insider Trading Arrangements and Policies

We are committed to promoting high standards

of ethical business conduct and compliance with applicable laws, rules, and regulations.

As part of this commitment, we have adopted

our Insider Trading Compliance Policy governing the purchase, sale, and/or other dispositions of our securities by our directors, officers,

and employees that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations, and the

exchange listing standards applicable to us.

A copy of our Insider Trading Compliance Policy is filed as Exhibit 19.1 to this Annual

Report on Form 10-K for the year ended December 31, 2023.

We are committed to promoting high standards of

ethical business conduct and compliance with applicable laws, rules, and regulations.

As part of this commitment, we have adopted our

Insider Trading Policy governing the purchase, sale, and/or other dispositions of our securities by our directors, officers, and employees

that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations, and the exchange listing

standards applicable to us.

A copy of our Insider Trading Policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K for the year

ended December 31, 2024.

Under the Company’s Insider Trading Policy,

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Clawback Policy

Additionally, our Board has adopted a policy

relating to recovery of erroneously awarded compensation (a “Clawback Policy”) in accordance with the rules of the NYSE,

to recoup “excess” incentive compensation, if any, earned by current and former executive officers during a three year look

back period in the event of a financial restatement due to material noncompliance with any financial reporting requirement under the

securities laws (with no fault required).

Our Clawback Policy is filed as Exhibit 97.1 to this Annual Report on Form 10-K for the year

ended December 31, 2023.

Our Board has adopted a policy relating to recovery

of erroneously awarded compensation (a “Clawback Policy”) in accordance with the rules of the New York Stock Exchange, to

recoup “excess” incentive compensation, if any, earned by current and former executive officers during a three year look back

period in the event of a financial restatement due to material noncompliance with any financial reporting requirement under the securities

laws (with no fault required).

Our Clawback Policy is filed as Exhibit 97.1 to the Annual Report

on Form 10-K for the year ended December 31, 2023.

Executive Compensation.

Executive Compensation Overview

As an “emerging

growth company,” we have opted to comply with the executive compensation disclosure rules applicable to “smaller reporting

companies,” as such term is defined in the rules promulgated under the Securities Act.

This section provides

an overview of the compensation awarded to, earned by, or paid to each individual who served as our principal executive officer during

our fiscal year 2023.

Our named executive officers, or the Named Executive Officers, for the year ended December 31, 2024, are:

Allan Evans, our Chief Executive Officer;

Brandon Torres Declet, our former Chief Executive

Brandon Torres Declet, our former Chief Executive Officer;

Brian Hoff, our Chief Financial Officer

Andrew Camden, our Chief Operating Officer

Unusual Machines Summary

Compensation Table Year Ended December 31, 2023

The following table

contains information about the compensation paid to or earned by each Officer (each a “Named Executive Officer”) with during

the two most recently completed fiscal years.

Compensation Table Years Ended December 31, 2024 and 2023

The following table contains

information about the compensation paid to or earned by each Named Executive Officer for the two most recently completed fiscal years.

Name and Principal Position

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Chief Financial Officer

Andrew Camden (4)

Chief Operating Officer

________________________

Evans was appointed Chief Executive Officer in December 2023.

2023 and did not serve during the 2022 fiscal year.

Declet was appointed Chief Executive Officer in May 2022 and resigned

from the Board and as Chief Executive Officer in November 2023.

Declet did not serve during the 2021 fiscal year.

executed a termination agreement pursuant to which he received three months of salary as severance and three months of medical and

insurance premiums.

Declet received 16,086 shares of our common stock.

April 30, 2024, Dr.

Evans consulting company, 8 Consulting, LLC entered into a two-year Management Services Agreement to serve as the

Company’s Chief Executive Officer.

Declet was appointed Chief Executive Officer in May 2022 and resigned from the Board and as Chief Executive Officer in November 2023.

Declet executed a termination agreement pursuant to which he received three months of salary as severance and three months of medical and insurance premiums.

Declet received 16,086 shares of our Common Stock with a value of $4 per share.

Hoff was appointed Chief Financial Officer in November 2022.

Fat Shark and Rotor Riot Summary Compensation

Set forth below is summary compensation information

similar to that set forth above, but reflecting amounts paid, payable or allocable to Fat Shark or Rotor Riot for executive officers

of one or both of those entities who exceeded the enumerated threshold and which the Company anticipates hiring as an executive officer

of the Company (directly or through Fat Shark or Rotor Riot) in connection with the acquisition of those entities in the Business Combination

(the “Business Combination Officers”).

The compensation information relates to the fiscal year end April 30, 2023 and 2022,

respectively.

Camden was appointed our Chief Operating Officer on March 4, 2024.

Principal Position(1)

Andrew Camden

President of Rotor Riot

_________________

Represents principal position(s) held at Red Cat, Fat Shark and/or Rotor Riot.

Represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 of

10-year options to purchase 100,000 shares of Red Cat common stock at an exercise price of $2.60, which become fully vested on June

Camden was appointed Chief Operating Officer in March 2024.

Prior to that, Mr.

Camden was the President of Rotor Riot and his 2023 compensation is based on his employment with Red Cat and Rotor Riot prior to the completion of our IPO and acquisitions in February 2024.

Amounts reflect the aggregate grant date fair value of restricted share

grants computed in accordance with FASB ASC Topic 718.

Assumptions used in the calculation of these amounts are included in Note 10 included

in our consolidated financial statements.

There can be no assurance that unvested awards will vest.

Option awards are valued in accordance with ASC 718, Compensation – Stock Compensation.

Fair value is determined based on the Black-Scholes Model using inputs reflecting our estimates of expected volatility, term, discount rates, and dividend expectations.

Compensation expense is recognized based on the vesting terms of the award.

Outstanding Equity

Awards at December 31, 2024

There were no outstanding equity awards held by our Named Executive

Officers as of December 31, 2023.

The table below summarizes outstanding equity awards held by our Named

Executive Officers at December 31, 2024.

All of the below awards were issued under the Plan.

Number of Shares or Units of Stock That Have Not Yet Vested (#)

Market Value of Shares or Units of Stock That Have Not Vested ($)(1)

Andrew Camden

____________________

* Awarded to 8 Consulting, LLC

(1) The market value of shares or units of stock that have not yet vested is based on our stock price as of December 31, 2024.

Employment Agreements

Employment Agreement with Dr.

Chief Executive Officer

Employment Agreement relating to Dr.

Evans, Chief Executive Officer

On November 27, 2023, the Company and Dr.

Evans entered into an Offer Letter (the “Offer Letter”) under which Dr.

Evans serves as the Company’s Chief Executive

Officer effective December 4, 2023.

The Offer Letter provides that Dr.

Evans receives:

(i) an annual base salary of $250,000, subject

to annual review;

(ii) eligibility to earn an annual bonus at the sole discretion of the Company’s Board;

(iii) a grant of restricted

stock units (“RSUs”) equal to 5% of the outstanding common stock of the Company, vesting on the earlier of (a) a secondary

offering, (b) a Change of Control event as defined in Treasury Regulation Section 1.409A-3(i)(5), or (c) the one year anniversary of

the signing of the Offer Letter;

and (iv) eligibility to participate in employee benefit plans and programs.

Evans agreed to serve as the Company’s Chief

Executive Officer effective December 4, 2023.

On April 30, 2024, the

Company’s Board approved the Company entering into a two-year Management Services Agreement (the “Agreement”) with 8

Consulting LLC (the “Consultant”) for the services of our Chief Executive Officer, Dr.

Allan Evans, whereby the Consultant

agreed to cause Dr.

Evans to perform his services as the Company’s Chief Executive Officer and the Consultant will be compensated

on behalf of Dr.

Evans by the Company in connection with his performance of such services.

The Agreement allows Dr.

Evans to receive favorable

tax benefits as a resident of the Commonwealth of Puerto Rico who will perform such services in Puerto Rico.

Pursuant to the Agreement,

Evans will perform the duties and responsibilities that are customary for a chief executive officer of a public company that either

have revenues similar to the Company on a pro forma basis as reflected in the Prospectus filed with the SEC on February 15, 2024, or if

pre-revenues, are an active and on-going business that are performing pre-revenue activities.

The Consultant agreed to cause Dr.

as Chief Executive Officer, (i) to undertake primary responsibility for managing all aspects of the Company and overseeing the preparation

of all reports, registration statements and other filings required filed by the Company with the SEC and executing the certifications

required the Sarbanes Oxley Act of 2002 and the rules of the SEC as the principal executive officer of the Company;

(ii) attend investor

meetings and road shows in connection with the Company’s fundraising and investor relations activities;

(iii) to report to the Company’s

(iv) to perform services for such subsidiaries of the Company as may be necessary.

The Consultant receives

a $250,000 fee per year payable in monthly installments.

In addition, the Consultant was granted 488,000 fully vested shares of restricted

Common Stock.

The fair value of the shares was $585,600 based on the $1.20 quoted trading price on the Grant Date and will be recognized

over the service period (see below).

The grant of restricted common stock was made under the Company’s 2022 Equity Incentive Plan.

The Company and Dr.

Evans have agreed to negotiate

an acceptable Employment Agreement consistent with the terms of the Offer Letter.

The Employment Agreement (“Employment Agreement”)

shall be for a term of at least two years.

The Employment Agreement will contain a non-compete provision that for a period of 12 months

Evans is no longer employed by the Company, he will not, directly or indirectly, either as proprietor, stockholder, partner,

officer, employee or otherwise, distribute, sell, offer to sell, or solicit any orders for the purchase or distribution of any products

or services which are similar to those distributed, sold or provided by the Company during the 12 months preceding his termination of

employment with the Company, to or from any person, firm or entity which was a customer of the Company during the 12 months preceding

such termination of employment.

This section in his Employment Agreement may not be waived by the Company without the consent of Red

Evans previously entered into an Offer Letter dated November 27, 2023, under

which he would serve as the Company’s Chief Executive Officer effective as of December 4, 2023.

The Agreement terminates and replaces

the Offer Letter dated November 27, 2023.

Employment Agreement with Brian Hoff, Chief

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entitles him to the following:

Eligibility to earn an annual bonus of 50% of his annual base salary

based on key performance indicators, as set forth in a bonus plan that is to be established, approved, administered and determined

by the Board and the Chief Executive Officer.

A cash and/or equity bonus of up to $125,000 upon the closing of each

successful acquisition with the closing of this Offering, he will receive a $125,000 bonus.

A cash bonus and/or equity bonus equal to up to $125,000 upon the completion

of a capital raise event, defined as a second offering, a private placement offering, an at-the-market offering, a private investment

in public equity offering.

A grant of RSUs equal to 3% of the outstanding common stock of the

Company (after giving effect to the First Hoff Amendment).

The RSUs will vest on the earlier of (i) a secondary offering, (ii) a

Change of Control event as defined in Treasury Regulation Section 1.409A-3(i)(5), or (iii) the one year anniversary of the consummation

of the Offering.

This grant becomes effective upon the earlier to occur of 30 days following (i) the closing of the Fat Shark and

Rotor Riot acquisition and (ii) the date on which the Company reasonably determines not to proceed with the acquisition.

Eligibility to earn an annual bonus of 50% of his annual base salary based on key performance indicators, as set forth in a bonus plan that is to be established, approved, administered and determined by the Board and the Chief Executive Officer.

A cash and/or equity bonus of up to $125,000 including the bonus he received following the acquisition of Fat Shark and Rotor Riot.

A cash bonus and/or equity bonus equal to up to $125,000 upon the completion of a capital raise event, defined as a second offering, a private placement offering, an at-the-market offering, a private investment in public equity offering.

A grant of RSUs equal to 3% of the outstanding Common Stock of the Company (after giving effect to the First Hoff Amendment).

The RSUs vested following the Closing of the IPO.

Additionally, under his Employment Agreement,

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For this purpose, Good Reason is generally defined

as (i) any reduction in his base salary, (ii) any material diminution of his authorities, titles or offices, (iii) being required to

report to anyone other than the Chief Executive Officer, (iv) a request by the Company to relocate, or (v) material breach of his Employment

as (i) any reduction in his base salary, (ii) any material diminution of his authorities, titles or offices, (iii) being required to report

to anyone other than the Chief Executive Officer, (iv) a request by the Company to relocate, or (v) material breach of his Employment

Agreement without cure after 30 days’ written notice.

Cause is generally defined as (i) failure to

perform his material duties under the Employment Agreement, following 30 days’ written notice without cure, (ii) willful misconduct

or gross negligence or breach of a fiduciary duty owed to the Company, (iii) conviction of our guilty pleas to a felony or other criminal

offense involving moral turpitude, (iv) any act or omission involving dishonesty, disloyalty, or fraud causing or reasonably expected

to cause significant economic harm to the Company, or (v) material breach of his Employment Agreement without cure after 30 days’

written notice.

Cause is generally defined as (i) failure to perform

his material duties under the Employment Agreement, following 30 days’ written notice without cure, (ii) willful misconduct or gross

negligence or breach of a fiduciary duty owed to the Company, (iii) conviction of our guilty pleas to a felony or other criminal offense

involving moral turpitude, (iv) any act or omission involving dishonesty, disloyalty, or fraud causing or reasonably expected to cause

significant economic harm to the Company, or (v) material breach of his Employment Agreement without cure after 30 days’ written

E mployment arrangement with Andrew Camden,

Chief Operating Officer

Our Board of Directors appointed Mr.

Chief Operating Officer on March 4, 2024, and agreed to pay him a salary of $150,000 per year.

Our Board appointed Mr.

Camden, Chief Operating

Officer on March 4, 2024, and agreed to pay him a salary of $150,000 per year.

In September 2024, the Compensation Committee approved

increasing Mr.

Camden’s salary to $200,000.

Non-Employee Director Compensation

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Following our February

2024 IPO, our board of directors approved compensation for our non-employee directors.

Our non-employee directors will receive annual

aggregate compensation of $60,000 for service on the board which will be comprised of cash and equity grants.

Additional compensation

for the chairperson members as set forth below.

2024 IPO, our Board approved compensation for our non-employee directors.

Our non-employee directors will receive annual aggregate compensation

of $60,000 for service on the Board comprised of cash and equity grants.

Additional compensation for the chairperson members as set forth

All cash payments and equity grants will be made semi-annual in arrears.

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All equity grants issued

to our non-employee directors will be granted under our 2022 Equity Incentive Plan.

Security Ownership of Certain Beneficial Owners and Management and Related

Stockholder Matters

to our non-employee directors will be granted under our Plan.

On February 3, 2025,

the Board determined that for 2025 non-employee directors will be granted $90,000 payable in restricted Common Stock with the number

of shares determined based upon the closing price of the Company’s Common Stock during each open window period with the first grant

equal to two-quarters of compensation on May 19, 2025 using the May 19 th closing price to determine the number of shares,

the second quarter grant equal to 25% of the total using the August 19, 2025 closing price and the final grant of restricted stock using

the November 19, 2025 closing price with all grants vested and the grants subject to continued service as of the grant date and execution

of the Company’s standard Restricted Stock Agreement.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth information regarding

the beneficial ownership of our common stock as of March 21, 2024 by (i) each person, entity or group (as that term is used in Section

13(d)(3) of the Securities Exchange Act of 1934) known to the Company to be the beneficial owner of more than 5% of the outstanding common

the beneficial ownership of our Common Stock as of March 25, 2025 by (i) each person,

entity or group (as that term is used in Section 13(d)(3) of the Exchange Act known to the Company to be the beneficial owner of more

than 5% of the outstanding Common Stock;

(ii) each of our directors;

(iii) each of our Named Executive Officers;

and (iv) all executive officers and directors as a group.

Information relating to beneficial ownership

of common stock by our principal stockholders and management is based upon information furnished by each person using “beneficial

ownership” concepts under the rules of the SEC.

Under these rules, a person is deemed to be a beneficial owner of a security if

that person directly or indirectly has or shares voting power, which includes the power to vote or direct the voting of the security,

or investment power, which includes the power to dispose or direct the disposition of the security.

The person is also deemed to be a

beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days.

Under the SEC rules,

more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner

of securities as to which he or she may not have any pecuniary interest.

Except as noted below, each person has sole voting and investment

power with respect to the shares beneficially owned and each stockholder's address is c/o Unusual Machines, Inc., 4667 LB McLeod Rd.,

Suite J, Orlando Florida, 32811.

and (iv) all executive

officers and directors as a group.

Information relating to beneficial ownership of

Common Stock by our principal stockholders and management is based upon information furnished by each person using “beneficial ownership”

concepts under the rules of the SEC.

Under these rules, a person is deemed to be a beneficial owner of a security if that person directly

or indirectly has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power,

which includes the power to dispose or direct the disposition of the security.

The person is also deemed to be a beneficial owner of any

security of which that person has a right to acquire beneficial ownership within 60 days.

Under the SEC rules, more than one person may

be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which

he or she may not have any pecuniary interest.

Except as noted below, each person has sole voting and investment power with respect to

the shares beneficially owned and each stockholder's address is c/o Unusual Machines, Inc., 4677 LB McLeod Rd., Suite J, Orlando Florida,

The percentages below are calculated based on

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Name and Address of Beneficial Owner

Title of Class

Amount of Shares Beneficially Owned (1)

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Named Executive Officers and Directors:

Andrew Camden

Jeffrey Thompson (2)

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Other 5% Holders

Red Cat Holdings (1)

Thompson is the Chief Executive Officer of

We have been informed by Red Cat’s counsel that Mr.

Thompson is not deemed to be the beneficial

owner of the shares beneficially owned by Red Cat and that the Red Cat board of directors will have voting

power and investment power for the shares that will be held by Red Cat.

The numbers and percentages outstanding in these columns,

693,227 shares of our Common Stock available for future issuance under

the Company’s Plan, which includes shares of Common Stock deliverable under grants of RSUs since the underlying Common Stock

cannot be delivered within 60 days of the date of this Form 10-K to our executives;

8,500 shares of our Common Stock issuable upon the exercise of warrants to an underwriter of our IPO (the “Representative’s Warrants”).

The Representative’s Warrants can be exercised at any time, and from time to time, in whole or in part, during the five-year period commencing 180 days following February 16, 2024.

164,473 shares of our Common Stock issuable upon the exercise of warrants from the October 2024 Private Placement.

The warrants can be exercised at any time, and from time-to-time, in whole or in part, during the five and a half year period from February 25, 2025.

On February 26, 2025, the Company issued 1,224,606 shares of Common Stock to various warrant holders who exercised their warrants at an exercise price of $1.99.

The Company received gross proceeds in the aggregate amount of $2,436,966 as a result of the warrant exercises.

The shares of common stock issued are fully registered under the Registration Statement on Form S-1 (SEC Registration Number 333-283494).

All such warrants were exercised other than such warrants held by Allan Evans, our Chief Executive Officer, Sanford Rich and Robert Lowry, who are each members of our Board.

Address is 15 Ave.

Ste 2200, San Juan, PR 00901.

As of the date of this Annual Report, the Red Cat board of directors is

comprised of Jeffrey Thompson, Joseph Freedman, Christopher Moe, and Nicholas Liuzza.

(2) The numbers and percentages outstanding in these columns, exclude:

1,461,876 shares

of our common stock available for future issuance under the Company’s 2022 Equity Incentive

Plan, which includes shares of common stock deliverable under grants of Restricted Stock

Units since the underlying common stock cannot be delivered within 60 days of the date of

this Information Statement to our executives;

62,500 shares of

our common stock issuable upon the exercise of warrants to Dominari Securities LLC (the “Representative’s

The Representative’s Warrants can be exercised at any time, and from

time to time, in whole or in part, during the five-year period commencing 180 days following

February 16, 2024.

600,000 shares,

issuable upon conversion of Series B preferred stock.

The Series B preferred stock can be

converted to common stock upon written notice to the Company.

Munoz Rivera Ste 2200, San Juan, PR 00901.

Certain Relationships and Related Party Transactions and Director Independence

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since January 1, 2022, to which we were a party or will be party, in which the amount involved exceeded or will exceed the lesser of $120,000

$120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years, and any of our directors, executive

officers or holders of more than 5% of our outstanding capital stock, or any immediate family member of, or person sharing the household

with, any of these individuals or entities, had or will have a direct or indirect material interest.

or 1% of the average of our total assets at year-end for the last two completed fiscal years, and any of our directors, executive officers

or holders of more than 5% of our outstanding capital stock, or any immediate family member of, or person sharing the household with,

any of these individuals or entities, had or will have a direct or indirect material interest.

As permitted by the SEC rules, discussion

of employment relationships or transactions involving the Company’s executive officers and directors, and compensation solely resulting

from such employment relationships or transactions, or service as a director of the Company, as the case may be, has been omitted to

the extent disclosed in the Executive Compensation or the Director Compensation section of this annual report, as applicable.

from such employment relationships or transactions, or service as a director of the Company, as the case may be, has been omitted to the

extent disclosed in the Executive Compensation or the Director Compensation section of this annual report, as applicable.

In November 2024, the Company entered into and received a purchase

order with Teal Drones, Inc.

a wholly owned subsidiary of Red Cat to provide goods and services to a customer in which Teal Drones is

a prime contractor and the Company is a subcontractor.

Red Cat is a related party as Jeff Thompson is the Chief Executive Officer of Red

Cat and is also on the Board of Directors of Unusual Machines.

The Company recognized $155,000 in revenue related to the related party

contract during the year ended December 31, 2024.

The total value of the contract between Unusual Machines and Red Cat is $250,000.

On October 30, 2024, Allan Evans, the Company’s

Chief Executive Officer and Sanford Rich and Robert Lowry, each a member of the Company’s Board, invested an aggregate of $250,000

in the Private Placement on identical terms to the other Investors.

On April 30, 2024 (“Grant Date”),

the Company’s Board approved the Company entering into a two-year Consulting Agreement with the Consultant for the services of our

Chief Executive Officer, Dr.

Allan Evans, whereby the Consultant agreed to cause Dr.

Evans to perform his services as the Company’s

Chief Executive Officer and the Consultant is compensated on behalf of Dr.

Evans by the Company in connection with his performance of

such services.

See “Executive Compensation – Employment Agreements.” The Agreement allows Dr.

Evans to receive favorable

tax benefits as a resident of the Commonwealth of Puerto Rico who will perform such services in Puerto Rico.

In February 2024, the Company completed the acquisitions

to purchase Fat Shark and Rotor Riot from Red Cat.

Jeffrey Thompson is the founder and current Chief Executive Officer of Red Cat.

Thompson is also the founder, prior Chief Executive Officer and current member on the Board of Unusual Machines.

Prior to the acquisition,

Thompson held 328,500 shares of Common Stock in Unusual Machines, which represented approximately 10% prior to the acquisition and

On December 8, 2023, our former Chief Executive

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Declet received 16,086 shares of our Common Stock in January 2024.

On September 10, 2021, our founder and former

Chief Executive Officer Jeffrey Thompson subscribed for 2,400,000 shares of our common stock for a total subscription price of $24,000.

Thompson subsequently subscribed for an additional 52,000 shares of our common stock on September 14, 2021 for an additional $26,000.

In November 2022, we entered into the Purchase

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director, pursuant to which, among other things, Mr.

Thompson and the Company have agreed to indemnification obligations, which shall

survive for a period of nine months, subject to certain limitations, which includes a basket of $250,000 before any claim can be asserted

and a cap equal to the value of 100,000 shares of our common stock owned by him to secure any indemnification obligations, which stock

is our sole remedy, except for fraud.

Torres Declet negotiated the terms of the Purchase Agreement on an arms’ length basis

with Joe Freedman who was the head of Red Cat’s Special Committee.

Thompson and the Company agreed to indemnification obligations, which shall survive

for a period of nine months, subject to certain limitations, which includes a basket of $250,000 before any claim can be asserted and

a cap equal to the value of 100,000 shares of our Common Stock owned by him to secure any indemnification obligations, which stock is

our sole remedy, except for fraud.

Our then Chief Executive Officer negotiated the terms of the Purchase Agreement on an arms’ length

basis with Joe Freedman who was the head of Red Cat’s Special Committee.

The transaction was ultimately approved by the Company’s

and Red Cat’s board of directors.

On March 8, 2023, a majority of the disinterested Red Cat shareholders approved the transactions

contemplated in the Purchase Agreement in a special meeting.

and Red Cat’s Board.

On March 8, 2023, a majority of the disinterested Red Cat shareholders approved the transactions contemplated

in the Purchase Agreement in a special meeting.

Thompson recused himself from such vote.

In November 2020, Red Cat acquired Fat Shark

Holdings for a total purchase price of $8.4 million.

In January 2020, Red Cat acquired Rotor Riot for a total purchase price of $2.0

Since July 2017, Fat Shark has used Shenzhen

Fatshark Co, Ltd., referred to herein as the “Supplier,” a drone manufacturing company located in Shenzhen, China, as its

primary contract manufacturer for Fat Shark’s drone products.

In exchange for the Supplier’s manufacturing services with

respect to these products, Fat Shark pays the Supplier amounts equal to 115% of the sum of the bill of material and the labor costs for

such production.

Molly Mo, a majority owner of the Supplier, is the wife of Greg French, the founder of Fat Shark.

Since January

1, 2020, Fat Shark has paid or accrued a total of $12,503,126 in purchase orders to the Supplier.

As of December 31, 2023, Fat Shark

owed the related party Supplier $66,815, which does not include unfilled purchase orders of approximately $1.29 million.

purchase orders relate to anticipated inventory purchases and the timing of fulfilling those purchase orders depends on sales and inventory

Principal Accountant Fees and Services

BF Borgers, CPA, PC audited our financial statements

for the fiscal year ended December 31, 2023, in addition to the stand alone financial statement audits for Fat Shark and Rotor Riot in

connection with our IPO.

Salberg & Company, P.A.

audited our financial

statements for the fiscal year ended December 31, 2024 and 2023.

Independent Registered Public Accounting

The following is a summary and description

of fees incurred by BF Borgers, CPA, PC for the fiscal year ended December 31, 2023 and 2022.

of fees incurred by Salberg & Company, P.A.

for the fiscal years ended December 31, 2024 and 2023.

Audit fees (1)

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________________________

(1) Audit fees consist

of fees for the audit of our annual financial statements and the quarterly reviews of our interim financial statements in connection

with our IPO, in addition, it consists of the stand alone audits related to Fat Shark and Rotor Riot annual financial statements and

the stand alone quarterly reviews of Fat Shark and Rotor Riot financial statements in connection with our IPO.

We expect these fees to

be reduced now that we have consummated our IPO and will provide consolidated annual financial statement audits and quarterly interim

(1) Audit fees consist of fees for the audit of our annual financial statements and the quarterly reviews

of our interim financial statements.

(2) All other fees consist of fees related to reviews of our registration statements during the year.

Audit Committee Pre-approval Policy and

Our audit committee

has adopted policies and procedures relating to the approval of all audit and non-audit services that are to be performed by our independent

Our Audit Committee has

adopted policies and procedures relating to the approval of all audit and non-audit services that are to be performed by our independent

registered public accounting firm.

This policy provides that we will not engage our independent registered public accounting firm to

render audit or non-audit services unless the service is specifically approved in advance by our audit committee or the engagement is

entered into pursuant to the pre-approval procedure described below.

This policy provides that we will not engage our independent registered public accounting firm to render

audit or non-audit services unless the service is specifically approved in advance by our Audit Committee or the engagement is entered

into pursuant to the pre-approval procedure described below.

From time to time, our

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Exhibits and Financial Statement Schedules

For a list of the financial

statements included herein, see Index to the Financial Statements on page 51 of this Annual Report, incorporated

into this Item by reference.

For a list of the

financial statements included herein, see Index to the Financial Statements on page F-1 of this Annual Report, incorporated into

this Item by reference.

Statement Schedules

Financial statement

schedules have been omitted because they are either not required or not applicable or the information is included in the financial statements

or the notes thereto.

Financial statement schedules

have been omitted because they are either not required or not applicable or the information is included in the financial statements or

the notes thereto.

The exhibits required

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in the Exhibit Index are incorporated by reference herein.

EXHIBIT INDEX

Incorporated by Reference

Filed/Furnished

of Underwriting Agreement, dated February 14, 2024, by and between Unusual Machines, Inc.

Form of Underwriting Agreement, dated February 14, 2024, by and between Unusual Machines, Inc.

and Dominari Securities, LLC +

of Incorporation

of Amendment – Reverse Stock Split

Secured Convertible Promissory Note

of Designation of Series A Convertible Preferred Stock

of Designation of Series B Convertible Preferred Stock

of Promissory Note

Form of Representatives Warrant

of Representatives Warrant

Agreement and Plan of Merger by and between Unusual machines, Inc., a Puerto Rico corporation and Unusual machines, Inc., a Nevada corporation

Articles of Incorporation

Amended and Restated Bylaws

Amendment No.

to Amended and Restated Bylaws

Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock

Certificate of Designation of Series B Convertible Preferred Stock

Certificate of Designations, Preferences and Rights of Series C Convertible Preferred Stock

Form of 8% Promissory Note +

Revised Form of Representatives Warrant

Description of Securities

Purchase Agreement +

and Restated Amendment No.

Share Purchase Agreement +

Amended and Restated Amendment No.

1 to Share Purchase Agreement

Amendment No.

2 to Share Purchase Agreement

Amendment No.

3 to Share Purchase Agreement

Amendment No.

4 to Share Purchase Agreement

Agreement with Brian Hoff #+

of Amendment No.

1 to the to Employment Agreement with Brian Hoff #

of Patent Assignment

of Trademark Assignment

Filed/Furnished

of Non-Compete Agreement

of Restricted Stock Unit Agreement

Form of Registration Rights Agreement

2022 Equity Incentive Plan #

Offer Letter with Dr.

Torres Declet Termination and Release Agreement

of Lock-up Agreement

of Lock-up Agreement – Jeffrey Thompson

Evans Non-Compete Agreement

Insider Trading Compliance Policy

of Subsidiaries

Certification of the Principal Executive Officer pursuant to Rules

13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of the Principal Financial Officer pursuant to Rules

13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of the Principal Executive Officer pursuant to 18 U.S.C

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of the Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant

to Section 906 of the Sarbanes-Oxley Act of 2002.

Security Agreement

Employment Agreement with Brian Hoff #+

Form of Amendment No.

1 to the Employment Agreement with Brian Hoff #

Form of Patent Assignment

Form of Trademark Assignment

Form of Restricted Stock Unit Agreement

Amended 2022 Equity Incentive Plan #

Employment Offer Letter with Dr.

Allan Evans #

Brandon Torres Declet Termination and Release Agreement

Form of Lock-up Agreement

Form of Lock-up Agreement – Jeffrey Thompson

Allan Evans Non-Compete Agreement

Management Services Agreement #

Form of Restricted Stock Agreement

Form of Exchange Agreement +

Form of Closing Date working Capital Agreement and Consent +

Form of Restricted Stock Agreement

4% Convertible Promissory Note – Titan Multi-Strategy Fund I, Ltd.

4% Convertible Promissory Note – Eleven Ventures LLC +

Common Stock Purchase Warrant – Titan Multi-Strategy Fund I, Ltd.

Common Stock Purchase Warrant - Eleven Ventures LLC +

Exchange Agreement – Titan Multi-Strategy Fund I, Ltd.

Exchange Agreement – Eleven Ventures LLC +

Registration Rights Agreement – Titan Multi-Strategy Fund I, Ltd.

Registration Rights Agreement – Eleven Ventures LLC +

Letter Agreement - Titan Multi-Strategy Fund I, Ltd.

Letter Agreement - Eleven Ventures LLC

Amendment No.1 to 2022 Equity Incentive Plan, as amended #

Form of Restricted Stock Agreement

Form of Securities Purchase Agreement

Placement Agency Agreement

Registration Rights Agreement

Form of Common Stock Purchase Warrant

Form of Placement Agent Warrant

Form of Lock-up Agreement

Form of Restricted Stock Agreement

Form of Advisory Agreement

Form of Restricted Stock Agreement

Agreement and Plan of Merger and Reorganization dated February 1, 2025

Code of Ethics

Letter from Salberg & Company, P.A.

Insider Trading Policy

List of Subsidiaries

Certification of the Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of the Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of the Principal Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of the Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Clawback Policy

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Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

Certain schedules, appendices and exhibits

to this agreement have been omitted in accordance with Item 601(b)(2) of Regulation S-K.

A copy of any omitted schedule

and/or exhibit will be furnished supplementally to the SEC Staff upon request.

Indicates management contract or compensatory

plan, contract or agreement.

schedules, appendices and exhibits to this agreement have been omitted in accordance with Item 601(b)(2) of Regulation S-K.

A copy of any omitted schedule and/or exhibit will be furnished supplementally to the SEC Staff upon request.

management contract or compensatory plan, contract or agreement.

Furnished herein.

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Unusual Machines, Inc.

/ s/ Allan Evans

Chief Executive Officer, President and Director

(Principal Executive Officer)

/ s/ Brian Hoff

Chief Financial Officer

March 22, 2024

Pursuant to the requirements

of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant

of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant

and in the capacities and on the dates indicated.

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March 27, 2025

/s/ Jeffrey Thompson

March 27, 2025

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures