The share price of Unusual machines rose more than 100% on Wednesday morning after the small U.S. drone and drone components maker announced that Donald Trump Jr. – the eldest son of President-elect Donald Trump – had joined its advisory board.
“Adding Don Jr. to our advisory board provides us with unique expertise we need as we bring drone component manufacturing back to America,” Allan Evans, CEO of Unusual Machines, said in a statement.
“He brings a wealth of experience and I look forward to his advice and role in the company as we continue to grow our business,” said Evans, whose Orlando, Florida-based company has a market capitalization of less than $75 million .
Trump Jr. said in his own statement: “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 U.S. and look forward to taking a larger role in the movement,” Trump Jr. said.
In an S-1 filing Wednesday, Unusual Machines says its consumer business “has been heavily dependent on Chinese imports for our products and operations,” raising the risk that President-elect Trump will impose tariffs on Chinese imports.
“Due to the recent US presidential election, President-elect Trump is expected to threaten and potentially impose high tariffs on imports of goods from China, including the drones we use in our B2C business,” it said File. “If higher tariffs are imposed, it could have a material and adverse impact on our business and operating results.”
The president-elect said Monday he will impose “an additional 10% tariff on top of any additional tariffs” on imports from China unless the country stops trade in chemicals used to make the deadly opioid fentanyl.
In the same S-1 statement, Unusual Machines disclosed that Trump Jr. previously owned 331,580 shares of Unusual Machines stock prior to a stock offering listed in the statement and does not currently own any shares. The statement does not disclose what price Trump Jr. paid for his shares or at what price he sold them.
Trump Jr. told donors in early November that he would be joining venture capital firm 1789 Capital, The New York Times previously reported.
Unusual Machines completed its initial public offering of 1.25 million shares in February for net proceeds of $3.85 million.
The company recently reported revenue of just $3.56 million for the nine months ended September 30 and a net loss of $4.86 million for the same period.
The 52-week low for Unusual Machines stock is 98 cents per share. As of Wednesday morning, the stock, which closed at $5.36 per share on Tuesday, was trading at $9.50 per share.
Volume was high on Wednesday morning, with more than 29 million shares traded. The company's average 10-day trading volume is only about 380,000 shares. Unusual Machines only has 8.3 million shares outstanding.
When the company completed its IPO in February, it also acquired Red Cat drone brands Fat Shark and Rotor Riot. Jeffrey Thompson, the founder and CEO of Red Cat, is the founder, former CEO and current board member of Unusual Machines.
Unusual Machines noted in a recent regulatory filing that the company changed its accounting firm in April and “terminated its engagement with the previous auditor.”
“On May 3, 2024, the Securities and Exchange Commission (“SEC”) issued an order imposing a cease-and-desist order against the Company’s previous auditor, requiring the Company to retain new auditors and re-audit its financial statements for the years ended on December 31, 2023 and 2022,” the filing said.
This auditor was BF Borgers CPA, who also worked as an auditor Trump Media, the social media company whose majority owner is the president-elect.
In May, the SEC accused BF Borgers of “massive fraud” for work involving more than 1,500 SEC filings. Auditor and owner Benjamin Borgers agreed to be permanently suspended from practicing accounting before the SEC and to pay a total penalty of $14 million.
Shortly thereafter, Trump Media hired a new auditor to replace BF Borgers.
Unusual Machines said in its most recent quarterly report that its own new accounting firm had re-examined the company's previous financial reports and found that “certain transactions were not recorded in the correct period, stock compensation expense of $600,000 related to the April 7 common stock price.” . March 2023”. Equity offerings were not recorded and deferred offering costs were classified as operating activities rather than financing activities.”
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