What changed in this filing

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Item 9A. Controls and Procedures

2026-03-12 compared with 2025-03-27 · 304 added, 214 removed, 578 unchanged (47% of the section changed)

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and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, of the effectiveness

of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange

Act”) as of the end of the period covered by this report.

Based on that evaluation, our Principal Executive Officer and Principal

Financial Officer have concluded that our disclosure controls and procedures as of December 31, 2024, were not effective to ensure that

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 SEC’s rules and forms because of a material weakness in the Company’s

internal control over financial reporting as noted below.

of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act as of December 31, 2025.

The term “disclosure controls and procedures” as defined

in Rules 13a-15(e) and 15d-15(e) means controls and other procedures of the Company that are designed to ensure that information required

to be disclosed by the Company in reports, such as this report, that it files or submits under the Exchange Act is recorded, processed,

summarized and reported within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include,

without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports

that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal

executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding

required disclosure.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only

reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship

of possible controls and procedures.

Based on that evaluation, our Chief Executive

Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2025.

Management’s Report on Internal Control

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internal control over financial reporting based on the parameters set forth above and has concluded that as of December 31, 2025, our

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

internal control over financial reporting were 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.

generally accepted accounting principles.

Changes In Controls Over Financial Reporting

During the quarter ended December 31, 2025, the Company

continued to strengthen its internal controls including the implementation of advanced inventory modules within NetSuite for its financial

and transactional reporting.

In addition, the Company has successfully hired additional staff within the accounting, finance, and human

resource functions and the Company has updated their process documentation for financial reporting.

These changes and documentation of our internal controls have remediated

the previously disclosed material weaknesses in internal controls which includes sufficient segregation of duties within accounting functions

and having written documentation of our internal control policies and procedures.

Other 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

quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal controls over

financial reporting.

Other Information.

During the fourth quarter ended December 31, 2025,

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

none of our directors and officers (as defined in Rule 16a-1(f) under 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:

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

Name and Title

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December 15, 2025

March 2026 through December 2026

Up to 16,500 shares of Common Stock from March vesting for tax purposes

Chief Executive Officer and Director

December 15, 2025

May 2026 through December 2026

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December 15, 2025

April 2025 through December 2025

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

March 2026 through December 2026

Up to 11,413 shares of Common Stock from March vesting for tax purposes

Chief Financial Officer

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December 15, 2025

March 2026 through December 2026

Up to 9,625 shares of Common Stock from March vesting for tax purposes

Andrew Camden

Chief Operating Officer

December 15, 2025

May 2026 through December 2026

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Up to 9,625 shares of Common Stock from November vesting for tax purposes

Cristina Colon

Board of Director

December 15, 2025

March 2026 through December 2026

Up to 35 % of shares of Common Stock from March grant for tax purposes

Cristina Colon

Board of Director

December 15, 2025

May 2026 through December 2026

Up to 35 % of shares of Common Stock from May grant for tax purposes

Cristina Colon

Board of Director

December 15, 2025

August 2026 through December 2026

Up to 35 % of shares of Common Stock from August grant for tax purposes

Cristina Colon

Board of Director

December 15, 2025

November 2026 through December 2026

Up to 35 % of shares of Common Stock from November grant for tax purposes

Board of Director

December 15, 2025

March 2026 through December 2026

Up to 50 % of shares of Common Stock from March grant for tax purposes

Board of Director

December 15, 2025

May 2026 through December 2026

Up to 50 % of shares of Common Stock from May grant for tax purposes

Board of Director

December 15, 2025

August 2026 through December 2026

Up to 50 % of shares of Common Stock from August grant for tax purposes

Board of Director

December 15, 2025

November 2026 through December 2026

Up to 50 % of shares of Common Stock from November grant for tax purposes

Chief Revenue Officer (effective Jan 1, 2026)

December 15, 2025

March 2026 through December 2026

Up to 13,750 shares of Common Stock from March vesting for tax purposes

Chief Revenue Officer (effective Jan 1, 2026)

December 15, 2025

May 2026 through December 2026

Up to 13,750 shares of Common Stock from May vesting for tax purposes

Chief Revenue Officer (effective Jan 1, 2026)

December 15, 2025

August 2026 through December 2026

Up to 13,750 shares of Common Stock from August vesting for tax purposes

Chief Revenue Officer (effective Jan 1, 2026)

December 15, 2025

November 2026 through December 2026

Up to 13,750 shares of Common Stock from November vesting for tax purposes

*Denotes whether the trading plan is intended,

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Andrew Camden

Chief Operating Officer

President and Chief Operating Officer

Jeffrey Thompson

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the Company’s collective knowledge and capabilities.

Evans has also served as a director of DataCentrix, Inc.

DTCX) since December 15, 2025.

Evans’ management and public company

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2011 until October 2019.

Andrew Camden, Chief Operation Officer

Camden, who became our Chief Operating Officer

on March 4, 2024, has been President of Rotor Riot since 2018.

Prior to that, he worked for four years as an Engineer for General Motors.

Andrew Camden, President and Chief Operation

Camden, has been our President since January

As President, under our Bylaws he acts as the Chief Operating Officer.

Prior to his promotion, Mr.

Camden our Chief Operating

Officer on March 4, 2024.

He was President of Rotor Riot from 2018 through March 4, 2025.

Prior to that, he worked for four years as an

Engineer for General Motors.

As President of Unusual Machines, Mr.

Camden is responsible for operational execution, manufacturing, and

supply chain across the Company’s U.S.-based production footprint.

He joined Rotor Riot in 2017 and has played a key role in building

the operations that became Unusual Machines, supporting the transition from product development into scaled domestic manufacturing of

drone components.

Prior to entering the drone industry, Camden spent four years in engineering roles at General Motors, where he gained

experience in manufacturing operations and supply chain management.

Stacy Wright, Chief Revenue Officer

Stacy Wright has been our Chief Revenue Officer

since January 1, 2026.

Previously she was our Executive Vice President of Revenue from July 2025 through December 2025, President of

Rotor Riot from March 4, 2024 and Vice President of Rotor Riot from November 2020 through March 4, 2024.

Colón, Esq., Director

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experience led to her appointment as a director.

Colon is also a lawyer in Puerto Rico and Florida.

Colon is also a lawyer in Florida and Washington, D.C.

Robert Lowry, Director

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It has also been determined that Mr.

Thompson is not an independent director, having previously been Chief Executive Officer

of the Company in the last three years.

Thompson is not an independent director, because of the purchase orders we received from

Teal Drones, a Red Cat subsidiary.

Our Board has determined that Mr.

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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.

Evans 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

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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:

that requests a copy of our Code of Ethics in writing by contacting 5728 Major Blvd, Suite 250, Orlando, FL 32819, 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 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.

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, 2025.

Under the Company’s Insider Trading Policy,

all officers, directors and certain identified employees are prohibited from engaging in hedging transactions.

all officers, directors and certain identified employees are prohibited from engaging in hedging transactions, without prior approval

as outlined in our Insider Trading Policy.

Clawback Policy

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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.

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 incorporated by reference as Exhibit 97.1.

Executive Compensation.

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Allan Evans, our Chief Executive Officer;

Brandon Torres Declet, our former Chief Executive Officer;

Brian Hoff, our Chief Financial Officer

Andrew Camden, our Chief Operating Officer

Camden, our President and Chief Operating Officer

Unusual Machines Summary

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Chief Executive Officer

Brandon Torres Declet (2)

Former Chief Executive Officer

Brian Hoff (2)

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Evans was appointed Chief Executive Officer in December 2023.

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.

On 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.

Hoff was appointed Chief Financial Officer in November 2022.

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.

Camden was appointed

Chief Operating Officer in March 2024 and became our President on January 23, 2026.

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.

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

All other compensation relates to benefit insurance premiums paid by the Company

on behalf of our Named Executive Officers in accordance with our benefit plans.

Outstanding Equity

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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)

Number of Shares or Units of Stock Acquired on Vesting (#)

Market Value of Shares or Units of Stock Realized on Vesting ($)(1)

Andrew Camden

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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.

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.

Employment Agreements

Employment Agreement relating to Dr.

Consulting 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 agreed to serve as the Company’s Chief

Executive Officer effective December 4, 2023.

On April 30, 2024, the

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(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.

Under the Agreement,

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

In October 2025, the Company increased the fee to $300,000.

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 Plan.

The Company and Dr.

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.

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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In August 2023, the Employment

Agreement was amended (the “First Hoff Amendment”) to increase the percentage of RSUs from 1% to 3% (as discussed below).

Agreement was amended (the “First Hoff Amendment”) to increase the percentage of Restricted Stock Units (“RSUs”)

from 1% to 3% (as discussed below).

Pursuant to his Employment Agreement, Mr.

Hoff receives an annual base salary of $250,000.

2025, the Company increased Mr.

Hoff’s salary to $270,000.

In addition, Mr.

Hoff’s Employment Agreement

entitles him to the following:

Hoff’s Employment Agreement entitles him to the

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.

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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).

A grant of 293,000 shares of restricted stock (after giving effect to

the First Hoff Amendment).

The RSUs vested following the Closing of the IPO.

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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

Employment arrangement with Andrew Camden,

President and Chief Operating Officer

Our Board appointed Mr.

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increasing Mr.

Camden’s salary to $200,000.

Camden’s salary to $200,000 and again in October 2025, to $270,000.

On January 23, 2026, Mr.

Camden became our President.

Non-Employee Director Compensation

Our non-employee directors

did not receive any cash or equity compensation from the Company for the year ended December 31, 2023.

Following our February

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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

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.

Based on the recommendation of professional compensation

consultant that the Company retained to review the compensation for non-management directors of the Company, on September 29, 2025, the

Board approved that effective July 1, 2025, the compensation for the non-management directors was increased to $160,000 per year payable

in equal quarterly installments.

Such directors have the right to receive cash compensation or shares of the Company’s common stock

by providing the Company with written notice at least 10 days before the end of each quarter and to the extent any director elects to

receive shares of common stock, the number of shares of common stock will be determined by using the closing price of the common stock

on the NYSE American (regular hours) and on the last day of each quarter the shares will be delivered promptly thereafter.

Director Compensation Table

The following table sets forth information regarding

the compensation earned or paid for service on our Board of Directors by our non-employee directors during the year ended December 31,

Jeffrey Thompson

(1) Represents cash fees paid, accrued or earned for serving as directors including committee roles.

(2) Represents restricted common stock.

Amounts reported represent the aggregate grant date fair value of

awards granted without regard to forfeitures granted to the non-employee directors during 2025, computed in accordance with ASC 718.

amount does not reflect the actual economic value realized by the directors.

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 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;

the beneficial ownership of our Common Stock as of March 11, 2026 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;

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., 4677 LB McLeod Rd., Suite J, Orlando Florida,

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., 5728 Major Blvd, Suite

250, Orlando Florida, 32819.

The percentages below are calculated based on

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All executive officers and directors as a group (6 persons)

Other 5% Holders

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.

Munoz Rivera Ste 2200, San Juan, PR 00901.

Address is 5728 Major Blvd.

Suite 200, Orlando, FL 32819

Securities Authorized for Issuance Under

Equity Compensation Plan

The following table provides information regarding

our equity compensation plans as of December 31, 2025:

Equity Compensation Plan Information

Plan category

Number of securities to be issued upon exercise of outstanding options, warrants, and vesting of restricted stock

Weighted-average exercise price of outstanding options and warrants

Number of securities remaining available for future issuance under equity compensation plans

Equity compensation plans approved by security holders

Equity compensation plans not approved by security holders

The Company’s Plan currently has 1,489,830

shares of Common Stock available for future grants as of the date of this Annual Report on Form 10-K which includes the increase in total

authorized shares for the 5% evergreen provision as of January 1, 2026 and the increase of total authorized shares related to additional

issuances since December 31, 2025.

The Plan contains an “evergreen” provision,

pursuant to which the number of shares of Common Stock reserved for issuance pursuant to awards under such plan shall be increased on

the first day of each year beginning in 2025 and ending in 2032 equal to the lesser of (a) 5% of the shares of stock outstanding (on an

as converted basis) on the last day of the immediately preceding fiscal year and (b) such smaller number of shares of stock as determined

by our Board of Directors.

Certain Relationships and Related Party Transactions and Director Independence

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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

Officer, Brandon Torres Declet, and the Company executed a termination agreement (the “Termination Agreement”) pursuant to

Declet received three months of salary severance and three months of medical and insurance premiums.

In lieu of 603,208 RSUs

Declet was to be granted post IPO, Mr.

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

In November 2022, we entered into the Purchase

Agreement, as amended with Red Cat and Jeffrey Thompson, the Company’s former Chief Executive Officer and President and current

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

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.

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 January 2026, the Company received a $2.1 million

order from Teal Drones, which is a subsidiary of Red Cat.

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 order is expected to be delivered in the first half of 2026 and

includes several different drone components manufactured and sourced from the Company.

On December 29, 2025, the Company issued 142,299

shares of common stock to Dr.

Allan Evans, our CEO and two directors Robert Lowry and Sanford Rich related to exercising of 164,473 warrants

of the October 2024 private placement.

131,578 of these warrants were exercised on a cashless basis using the calculation as defined in

the warrant agreement at a volume-weighted average price of $11.81 and issuing a total of 109,404 shares of common stock for the cashless

32,895 of these warrants were exercised for cash proceeds of $65,461 and issuing a total of 32,895 shares of common stock.

Company cancelled the 164,473 warrants related to these exercises upon issuance of the common stock.

In October 2025, the Company received a $0.8 million

order from Teal Drones, which is a subsidiary of Red Cat.

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 approximately $0.2 million in revenue for the

year ended December 31, 2025.

The Company had a related party receivable of $0.2 million as of December 31, 2025.

The order includes several

different drone components manufactured and sourced from the Company.

In May 2025, in relation to the confidentially

marketed public offering as described in more detail in Note 10, “Earnings Per Share and Stockholders’ Equity”, Dr.

Evans, the Company’s CEO and three directors, Cristina Colón, Robert Lowry and Sanford Rich invested a total of $420,000

in the offering on identical terms to the other Investors and received a total of 84,000 shares of common stock.

Principal Accountant Fees and Services

7 unchanged sentences

Audit fees (1)

All other fees (2)

Audit related (2)

________________________

(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 fees consist of fees for the audit of our annual financial statements and the quarterly reviews of our interim financial statements.

All other fees consist of

fees related to reviews of our registration statements and issuance of comfort letters during the year.

Audit Committee Pre-approval Policy and

11 unchanged sentences

Exhibits and Financial Statement Schedules

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.

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

6 unchanged sentences

in the Exhibit Index are incorporated by reference herein.

EXHIBIT INDEX

Incorporated by Reference

2 unchanged sentences

and Dominari Securities, LLC +

Capital on DemandTM Sales

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

3 unchanged sentences

1 to Amended and Restated Bylaws

Second Amendment to the

Amended and Restated Bylaws

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

Certificate of Withdrawal for Series A Convertible Preferred Stock

Certificate of Designation of Series B Convertible Preferred Stock

Certificate of Withdrawal for Series B Convertible Preferred Stock

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

Certificate of Withdrawal for Series C Convertible Preferred Stock

Form of 8% Promissory Note +

Revised Form of Representatives Warrant

Placement Agent Warrant, issued to Dominari Securities

Description of Securities

15 unchanged sentences

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

2 unchanged sentences

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.

8 unchanged sentences

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

4 unchanged sentences

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

Placement Agency Agreement, dated as of May 5, 2025,

by and between Unusual Machines, Inc.

and Dominari Securities, LLC

Amendment and Waiver to Merger Agreement, dated as

of May 6, 2025, by and between Unusual machines, Inc., Aloft Technologies, Inc., UMAC Merger Sub, Inc., Jon Hegranes and Josh Ziering

Form of Restricted Stock Agreement

Lease Agreement, dated June 4, 2025, between unusual

Machines, Inc.

and Icon FL Orlando Industrial Owner Pool 5 GA/FL, LLC

Rotor Lab Pty Ltd Share Purchase Agreement, dated June

Form of Securities Purchase Agreement

Placement Agency Agreement

Placement Agency Warrant, issued to Dominari Securities

Amended and Restated 2022 Equity Incentive Plan #

Code of Ethics

2 unchanged sentences

List of Subsidiaries

Consent of Salberg & Company, P.A.

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.

10 unchanged sentences

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

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

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.

management contract or compensatory plan, contract or agreement.

Indicates management contract or compensatory plan, contract or agreement.

Furnished herein.

10 unchanged sentences

Chief Financial Officer

March 12, 2026

Pursuant to the requirements

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.

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.

/s/ Allan Evans

17 unchanged sentences

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