Unusual Machines, Inc.

We spent money on additional equipment to further expand our motor production, which is part of the $0.7 million in Capex.

SEC original ↗Unusual Machines, Inc. — Earnings release (8-K exhibit)EX-99May 14, 2026

Notes to Consolidated Condensed Financial Statements June 30, 2026 (Unaudited) Cash and Cash Equivalents The Company considers all highly liquid debt instruments and other short-term investments with maturities of three months or less, when purchased, to be cash equivalents.

SEC original ↗Unusual Machines, Inc. — 10-Q Quarterly report10-QAug 6, 2026

Therefore, the Company used an effective discount rate of 8.24% based on its last debt financings.

SEC original ↗Unusual Machines, Inc. — 10-Q Quarterly report10-QAug 6, 2026

Significant assumptions inherent in estimating the fair values include the estimated future cash flows, growth assumptions for future revenues (including gross margin, operating expenses, and capital expenditures), and a rate used to discount estimated future cash flow projections to their present value based on estimated weighted average cost of capital (i.

SEC original ↗Unusual Machines, Inc. — 10-Q Quarterly report10-QAug 6, 2026

Fair value is determined based on the Black-Scholes Model using inputs reflecting our estimates of expected volatility based on comparative companies through December 31, 2025, and historical volatility beginning of January 1, 2026, expected term using the simplified method and future dividends.

SEC original ↗Unusual Machines, Inc. — 10-Q Quarterly report10-QAug 6, 2026

This choice was made consciously to capture as much market share as possible during this phase of unprecedented market expansion.

SEC original ↗Unusual Machines, Inc. — Earnings release (8-K exhibit)EX-99May 14, 2026

1 Operations Update We continue with workforce expansion.

SEC original ↗Unusual Machines, Inc. — Earnings release (8-K exhibit)EX-99May 14, 2026

We plan to continue our relentless pace of expansion until we get much closer to meeting the supply volume needed to satiate the ever-growing demand for domestic drone components.

SEC original ↗Unusual Machines, Inc. — Earnings release (8-K exhibit)EX-99May 14, 2026

Cash Flow Management Responsible cash management is core to our ethos, and I want to highlight how we balance the costs of operational growth with our cash-management strategy.

SEC original ↗Unusual Machines, Inc. — Earnings release (8-K exhibit)EX-99May 14, 2026

Looking Ahead Our priorities moving forward remain clear.

SEC original ↗Unusual Machines, Inc. — Earnings release (8-K exhibit)EX-99May 14, 2026

· Gross margin for the first quarter was approximately 33%, which improved from the prior year, due in part to an increase in enterprise sales, increasing costs related to tariffs, and expanding certain retail margins.

SEC original ↗Unusual Machines, Inc. — Earnings release (8-K exhibit)EX-99May 14, 2026

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.

SEC original ↗Unusual Machines, Inc. — Earnings release (8-K exhibit)EX-99May 14, 2026

economy, technical or other issues that may affect the FAA’s rule making process including possible litigation, and the Risk Factors contained in our Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission (the "SEC") and our Prospectus Supplement filed with the SEC on March 19, 2026.

SEC original ↗Unusual Machines, Inc. — Earnings release (8-K exhibit)EX-99May 14, 2026

Legal Proceedings 35 Item 1A.

SEC original ↗Unusual Machines, Inc. — 10-Q Quarterly report10-QAug 6, 2026

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q, or Quarterly Report, contains forward-looking statements that involve risks and uncertainties.

SEC original ↗Unusual Machines, Inc. — 10-Q Quarterly report10-QAug 6, 2026