The share price of Unusual Machines soared more than 100% Wednesday morning after the small U.S. drone and drone component maker said that Donald Trump Jr. — the eldest son of President-elect Donald Trump — had joined its advisory board.
“Don Jr. joining our board of advisors provides us unique expertise we need as we bring drone component manufacturing back to America,” said Unusual Machines CEO Allan Evans in a statement.
“He brings a wealth of experience and I look forward to his advice and role within the Company as we continue to build our business,” said Evans, whose Orlando, Florida-based company has a market capitalization of less than $75 million.
Trump Jr., in his own statement, said, “The need for drones is obvious. It is also obvious that we must stop buying Chinese drones and Chinese drone parts.”
“I love what Unusual Machines is doing to bring drone manufacturing jobs back to the USA and am excited to take on a bigger role in the movement,” said Trump Jr.
In an S-1 filing on Wednesday, Unusual Machines says its consumer business “has been heavily dependent on Chinese imports for our products and operations,” and raises the risks of President-elect Trump imposing tariffs on Chinese imports.
“As a result of the recent United States presidential election, President-elect Trump is expected to threaten to and may impose steep tariffs on the importation from China of goods including the drones we use in our B2C business,” the filing said. “If there are increased tariffs imposed, it could materially and adversely affect our business and results of operations.”
The president-elect on Monday said he would slap “an additional 10% tariff, above any additional tariffs” on imports from China unless the nation stemmed the trafficking of chemicals used to make the deadly opioid fentanyl.
In the same S-1 statement, Unusual Machines disclosed that Trump Jr. had previously owned 331,580 shares of Unusual Machines before a share offering detailed in the statement, and currently owns no shares. The statement does not disclose the price paid by Trump Jr. for his shares, or what price he sold them at.
Trump Jr. earlier in November told donors he was joining the venture capital firm 1789 Capital, The New York Times previously reported.
Unusual Machines closed its initial public offering of 1.25 million shares of stock for net proceeds of $3.85 million in February.
The company recently reported revenues of just $3.56 million for the nine months ending Sept. 30 and a net loss of $4.86 million for the same period.
Unusual Machines shares’ 52-week low is 98 cents per share. As of Wednesday morning, the stock, which closed at $5.36 per share Tuesday, was trading at $9.50 per share.
Volume was heavy Wednesday morning, with more than 29 million shares trading hands. The company’s 10-day average trading volume is just 380,000 shares or so. Unusual Machines has just 8.3 million shares outstanding.
When the company completed its IPO in February, it also acquired the drone brands Fat Shark and Rotor Riot from Red Cat, whose founder and CEO Jeffrey Thompson is the founder, prior CEO and a current board member of Unusual Machines.
Unusual Machines in a recent regulatory filing noted that it changed its accounting firm in April and “terminated its engagement with their prior auditor.”
“On May 3, 2024, the Securities and Exchange Commission (“SEC”) issued an order that instituted a cease-and-desist against the Company’s previous auditor, which required the Company to obtain new auditors and re-audit its financial statements for the years ended December 31, 2023 and 2022,” the filing noted.
That auditor was BF Borgers CPA, which also had been the auditor for Trump Media, the social media company whose majority owner is the president-elect.
The SEC in May charged BF Borgers with “massive fraud” for work that affected more than 1,500 SEC filings. The auditor and owner Benjamin Borgers agreed to be permanently suspended from practicing as an accountants before the SEC and to pay a combined $14 million in penalties.
Trump Media soon after retained a new auditor to replace BF Borgers.
Unusual Machines in its recent quarterly report said that its own new accounting firm re-audited the company’s prior financial statements, and found that “certain transactions were not recorded in the correct period, stock compensation expense of $600,000 related to the March 7, 2023 common stock issuance was not recorded and deferred offering costs were classified as an operating activity rather than a financing activity.”
This is developing news. Check back for updates.
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