Unusual Machines Files S-1/A Amendment

TL;DR

UMAC filed an S-1/A update on Dec 5, 2024, with Q3 financials and preferred stock details.

AI Summary

Unusual Machines, Inc. filed an S-1/A amendment on December 5, 2024, to update its recent developments. The filing includes financial data for the periods ending September 30, 2024, and December 31, 2023, detailing preferred stock series A, B, and C, as well as common stock and additional paid-in capital.

Why It Matters

This amendment provides updated financial information and disclosures for Unusual Machines, Inc., which is crucial for investors to assess the company's current financial health and strategic direction.

Risk Assessment

Risk Level: medium — As an S-1/A filing, it indicates a company is in the process of going public or making significant changes to its public offering, which inherently carries higher risk due to the evolving nature of its financial and operational status.

Key Numbers

• Q3 2024 — Financial Period (Updated financial information for the third quarter of 2024 is included.)
• Series A, B, C Preferred Stock — Stock Types (Details on various series of preferred stock are provided as of September 30, 2024, and December 31, 2023.)

Key Players & Entities

• Unusual Machines, Inc. (company) — Filer of the S-1/A amendment
• December 5, 2024 (date) — Filing date of the S-1/A amendment
• September 30, 2024 (date) — End of the most recent fiscal quarter reported
• December 31, 2023 (date) — End of the previous fiscal year reported

FAQ

Key Financial Figures

• $226,250 — s, with cash proceeds to the Company of $226,250; the issuance of 8,750 shares of our c
• $43,750 — s, with cash proceeds to the Company of $43,750; the issuance of 845,135 shares of ou
• $1,681,818 — or in connection with the conversion of $1,681,818 of a 4% Promissory Note due November 30
• $1.99 — mber 30, 2025, at a conversion price of $1.99; the issuance of 662,403 shares of ou
• $1,318,182 — stor in connection with a conversion of $1,318,182 of a 4% Convertible Promissory Note due
• $626,850 — s, with cash proceeds to the Company of $626,850 updates to the number of outstanding
• $1,955,000 b — in which it received gross proceeds of $1,955,000 before deducting fees to the placement ag
• $1.52 — 4 units at a per unit purchase price of $1.52 per unit. Each unit consisted of one sh
• $0.01 — of one share of common stock, par value $0.01 per share (the "Common Stock") and one
• $250,000 — of Directors, invested an aggregate of $250,000 in the Private Placement on identical t
• $156,400 — eeds raised in the Private Placement or $156,400 and warrants to purchase 102,895 shares
• $11.85 — r Common Stock on the NYSE American was $11.85. Investing in our securities involves
• $4.00 — mon Stock at a public offering price of $4.00 per share. The shares of Common Stock a
• $22.1 million — tor Riot and Fat Shark subsidiaries for $22.1 million (the "Purchase Price") comprised of (i)
• $1.1 million — (the "Purchase Price") comprised of (i) $1.1 million in cash, (ii) a $2.0 million promissory

Filing Documents

• umac_s1a1.htm (S-1/A) — 2193KB
• umac_ex2301.htm (EX-23.1) — 2KB
• image_001.jpg (GRAPHIC) — 8KB
• 0001683168-24-008527.txt ( ) — 8081KB
• umac-20240930.xsd (EX-101.SCH) — 49KB
• umac-20240930_cal.xml (EX-101.CAL) — 50KB
• umac-20240930_def.xml (EX-101.DEF) — 268KB
• umac-20240930_lab.xml (EX-101.LAB) — 409KB
• umac-20240930_pre.xml (EX-101.PRE) — 383KB
• umac_s1a1_htm.xml (XML) — 1089KB

USE OF PROCEEDS

USE OF PROCEEDS 35 DIVIDEND POLICY 35 DETERMINATION OF OFFERING PRICE 35 CAPITALIZATION 36 THE PRIVATE PLACEMENT 37 SELLING STOCKHOLDERS 38 PLAN OF DISTRIBUTION 41

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 49 MANAGEMENT 57 CORPORATE GOVERNANCE 59

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION 63 MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 67 RELATED PARTY TRANSACTIONS 68 PRINCIPAL STOCKHOLDERS 69 DESCRIPTION OF OUR SECURITIES 70 LEGAL MATTERS 73 EXPERTS 73 WHERE YOU CAN FIND MORE INFORMATION 73 INDEX TO FINANCIAL STATEMENTS 74 You should rely only on information contained in this Prospectus. We have not authorized anyone to provide you with information that is different from that contained in this Prospectus. The Selling Stockholders are not offering to sell or seeking offers to buy securities in jurisdictions where offers and sales are not permitted. We are responsible for updating this Prospectus to ensure that all material information is included and will update this Prospectus to the extent required by law. i CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Prospectus, contains forward-looking statements that involve risks and uncertainties. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements other than statements of historical facts contained in this Prospectus are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expects", "intends", "plans", "anticipates", "believes", "estimates", "predicts", "potential", "continue" or the negative of these terms or other comparable terminology.

Forward-looking statements

Forward-looking statements are neither historical facts nor assurances of future performance, and are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: our ability to manage our rapid growth and organizational change effectively; changes in the political and regulatory environment and in business and economic conditions in the United States and globally; our ability to list products on the U.S. Department of Defense's Blue UAS Framework; any failure of the United States to impose taxes on Chinese drones and drone parts; the failure of our partnership with a drone manufacturer to produce orders; The market and sales success of our existing and any new products; our ability to raise capital when needed and on acceptable terms; the sufficiency of our existing cash and cash equivalents to meet our working capital and capital expenditure needs over the next 12 months; our ability to make acquisitions and integrate acquired businesses into our company; our limited operating history; our ability to attract and retain qualified employees and key personnel; geopolitical conflicts in Ukraine and Israel; our ability to develop and maintain our brand cost-effectively; and the other factors set forth in " Risk Factors " beginning on page 6 of this Prospectus. You should read this Prospectus and the documents we have f

Forward-looking statements speak only as of the

Forward-looking statements speak only as of the date they are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of the information presented in this Prospectus particularly our forward-looking statements, by these cautionary statements. ii PROSPECTUS SUMMARY Background of Unusual Machines Unusual Machines is a Nevada corporation originally incorporated in Puerto Rico with our principal place of business in Orlando, Florida. The Company reincorporated from Puerto Rico to Nevada on April 22, 2024. Initial Public Offering On February 16, 2024, the Company closed its initial public offering (the "IPO") of 1,250,000 shares of Common Stock at a public offering price of $4.00 per share. The shares of Common Stock are traded on the NYSE American. Simultaneous with the closing of the IPO, the Company acquired Fat Shark Holdings Ltd. ("Fat Shark") and Rotor Riot LLC (the "Rotor Riot") from Red Cat. The Business Combination and Business Overview Under the terms of Share Purchase Agreement with Red Cat, (the "Purchase Agreement"), the Company purchased Rotor Riot and Fat Shark subsidiaries for $22.1 million (the "Purchase Price") comprised of (i) $1.1 million in cash, (ii) a $2.0

Use of Proceeds

Use of Proceeds We will not receive any proceeds from the sale of the Securities covered by this Prospectus, except from the exercise of the warrants. We intend to use any proceeds from the exercise of warrants for working capital and general corporate purposes.

Risk Factors

Risk Factors Investing in our Common Stock involves a high degree of risk. For a discussion of factors to consider before deciding to invest in our Common Stock, you should carefully review and consider the " Risk Factors " beginning on page 6 of this Prospectus. (1) The number of shares of our Common Stock to be outstanding after this offering assumes 13,914,018 outstanding as of December 3, 2024 (notwithstanding any beneficial ownership limitations) and (i) 1,389,079 Shares are issued upon the full exercise of the Warrants from the Private Placement, and (ii) 300,000 shares of common stock related to compensation for advisor agreements (the "Advisory Shares"). The Advisory Shares vest 50% upon November 22, 2024 and 50% upon May 22, 2025. Excludes the following: 428,000 shares of our Common Stock issuable upon conversion of outstanding Series A preferred stock (the "Series A"); 315,000 shares of our Common Stock issuable upon conversion of outstanding Series C preferred stock (the "Series C"); 323,500 shares issuable upon the full exercise of other warrants from our IPO and Series C; 330,000 shares issuable upon the full exercise of stock options issued to employees under our 2022 Equity Incentive Plan; and Future equity grants to our officers and independent directors. See " Executive Compensation ". Summary Risk Factors Our business and an investment in our Common Stock are subject to numerous risks and uncertainties, including those highlighted in this "Risk Factors" section below. Some of these risks include: Risks Related to our Business and Financial Condition Because the Company had a very limited operating history prior to its acquisition of Fat Shark and Rotor Riot, any investment in us is highly speculative. Fat Shark and Rotor Riot incurred net losses since their acquisition by Red Cat and may fail to achieve or maintain profitability. We will begin to amortize our intangibles, which will result in a non-cash charge going forwar

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