Unusual Machines, Inc. reported significant financial developments in its 10-Q filing for the quarter ending September 30, 2024, following its reincorporation from Puerto Rico to Nevada and the completion of its IPO on February 16, 2024. The company generated revenues of $1.5 million for the third quarter of 2024, a substantial increase from $0 in the same period of 2023. For the nine months ended September 30, 2024, total revenues reached $3.6 million, also up from $0 year-over-year. The gross profit for the third quarter was $399,487, reflecting a gross margin of 26%, while the nine-month gross profit was $992,094, with a gross margin of 28%.

Despite the revenue growth, Unusual Machines reported an operating loss of $1.5 million for Q3 2024, compared to a loss of $353,674 in Q3 2023. The nine-month operating loss increased to $4.1 million from $1.97 million in the prior year. The net loss for the third quarter was $2.1 million, a 506% increase from $353,674 in Q3 2023, and for the nine months, the net loss was $4.9 million, up from $2 million in the same period last year. Key factors contributing to the increased losses included stock compensation expenses, a $685,151 loss on debt extinguishment, and heightened general and administrative expenses related to the IPO and acquisitions.

The company’s total assets surged to $24.5 million as of September 30, 2024, compared to $1.5 million at the end of 2023, primarily due to the acquisitions of Fat Shark Holdings Ltd. and Rotor Riot, LLC, which were completed on February 16, 2024, for a total consideration of $22.1 million. This acquisition was aimed at enhancing brand recognition and expanding retail channels in the FPV drone market. Total liabilities also increased significantly to $5.3 million from $114,497 at the end of 2023.

Cash and cash equivalents rose to $1.7 million as of September 30, 2024, compared to $894,773 at the end of 2023. The company reported net cash used in operating activities of $2.7 million for the nine months ended September 30, 2024, compared to $1.4 million in the same period of 2023. In financing activities, net cash provided was $4.4 million, a notable increase from net cash used of $376,702 in the prior year, largely due to $5 million raised from the IPO.

Overall, Unusual Machines is navigating a transformative period marked by strategic acquisitions and significant revenue growth, albeit with ongoing challenges in profitability.