Donald Trump Jr. joins advisory board of drone maker Unusual Machines

Unusual Machines' stock price soared more than 100% Wednesday morning after the small U.S. maker of drones and drone components announced that Donald Trump Jr., the eldest son of President-elect Donald Trump, had joins its advisory board.

Stocks fell by midday but were still up more than 50% on the news.

“Don Jr. joining our advisory board brings us the unique expertise we need to 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 guidance and role within the company as we continue to grow our business,” said Evans, whose Orlando, Fla.-based company has a market capitalization 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 United States and I'm excited to play a bigger role in this movement,” Trump Jr. said.

In an S-1 filing Wednesday, Unusual Machines says its consumer business “is heavily dependent on Chinese imports for our products and operations,” and raises the risk that President-elect Trump might impose tariffs on Chinese imports.

“Following the recent presidential election in the United States, President-elect Trump is expected to threaten and may impose high tariffs on the importation of goods from China, including the drones we use in our B2C business “, the file states. “If an increase in customs duties is imposed, it could have a material adverse impact on our business and results of operations.”

The president-elect said Monday he would impose “an additional 10 percent tariff, above any additional tariff” on imports from China unless the country halts product trafficking chemicals used to make fentanyl, a deadly opioid.

In the same S-1 filing, Unusual Machines disclosed that Trump Jr. previously owned 331,580 shares of Unusual Machines prior to a stock offering detailed in the filing, and currently owns no shares. The statement does not reveal the price Trump Jr. paid for his shares, nor the price he sold them for.

Trump Jr. told donors earlier in November that he was joining venture capital firm 1789 Capital, The New York Times previously reported.

Unusual Machines closed its IPO of 1.25 million shares for net proceeds of $3.85 million in February.

The company recently reported revenue of just $3.56 million for the nine months ending September 30 and a net loss of $4.86 million for the same period.

Unusual Machines stock's 52-week low is 98 cents per share. As of 12:11 a.m. ET on Wednesday, the stock, which closed at $5.36 per share on Tuesday, was trading at $8 per share, a gain of nearly 50%.

Volume was heavy on Wednesday, with more than 32 million shares trading as of midday. The company's 10-day average trading volume is only around 380,000 shares. Unusual Machines only has 8.3 million shares outstanding.

When the company completed its IPO in February, it also acquired drone brands Fat Shark and Rotor Riot from Red Cat. Red Cat Founder and CEO Jeffrey Thompson is the founder, former CEO, and current board member of Unusual Machines.

Unusual Machines, in a recent regulatory filing, said it changed accounting firms in April and “terminated its engagement with its previous auditor.”

“On May 3, 2024, the Securities and Exchange Commission (“SEC”) issued a cease and desist order against the Company's former auditor, which required the Company to hire new auditors and to reaudit its financial statements for the years ended December 31, 2023 and 2022,” the filing said.

That auditor was BF Borgers CPA, who had also served as an auditor for Trump Media, the social media company whose majority shareholder is the president-elect.

In May, the SEC charged BF Borgers with “massive fraud” for work that affected more than 1,500 SEC filings. Auditor and owner Benjamin Borgers has agreed to be permanently suspended from practicing accounting with the SEC and to pay a total of $14 million in penalties.

Trump Media soon after retained a new auditor to replace BF Borgers.

Unusual Machines, in its recent quarterly report, said its own new accounting firm had re-audited the company's past financial statements and found that “certain transactions were not recorded in the correct period, a stock compensation expense of $600,000 linked to the joint action of March 7, 2023.” the share issue was not recorded and the 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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