Unusual Machines, Inc.
For the period ended Dec 31, 2024. Filed Mar 27, 2025.
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FY2024 · Filed Mar 27, 2025
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Item 11. Executive Compensation
| Item 11. | Executive Compensation. |
|---|
Executive Compensation Overview
This section provides an overview of the compensation awarded to, earned by, or paid to each individual who served as our principal executive officer during 2024. Our named executive officers, or the Named Executive Officers, for the year ended December 31, 2024, are:
| · | Allan Evans, our Chief Executive Officer; |
| · | Brandon Torres Declet, our former Chief Executive Officer; and |
| · | Brian Hoff, our Chief Financial Officer |
| · | Andrew Camden, our Chief Operating Officer |
Unusual Machines Summary Compensation Table Years Ended December 31, 2024 and 2023
The following table contains information about the compensation paid to or earned by each Named Executive Officer for the two most recently completed fiscal years.
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(5) | Option Awards ($)(6) | All Other Compensation ($) | Total ($) |
|---|---|---|---|---|---|---|---|
| Allan Evans (1) | 2024 | 250,000 | 131,000 | 733,600 | – | – | 1,114,600 |
| Chief Executive Officer | 2023 | 20,833 | – | – | – | – | 20,833 |
| Brandon Torres Declet (2) | 2024 | – | – | – | – | – | – |
| Former Chief Executive Officer | 2023 | 229,167 | – | 64,344 | – | 62,500 | 356,011 |
| Brian Hoff (3) | 2024 | 250,000 | 121,220 | 449,600 | – | – | 820,820 |
| Chief Financial Officer | 2023 | 250,000 | – | – | – | – | 250,000 |
| Andrew Camden (4) | 2024 | 167,094 | 6,678 | 158,000 | – | – | 331,772 |
| Chief Operating Officer | 2023 | 90,000 | – | – | – | – | 90,000 |
| (1) | Dr. Evans was appointed Chief Executive Officer in December 2023. On April 30, 2024, Dr. Evans consulting company, 8 Consulting, LLC entered into a two-year Management Services Agreement to serve as the Company’s Chief Executive Officer. |
| (2) | Mr. Declet was appointed Chief Executive Officer in May 2022 and resigned from the Board and as Chief Executive Officer in November 2023. Mr. Declet executed a termination agreement pursuant to which he received three months of salary as severance and three months of medical and insurance premiums. Mr. Declet received 16,086 shares of our Common Stock with a value of $4 per share. |
| (3) | Mr. Hoff was appointed Chief Financial Officer in November 2022. |
| (4) | Mr. Camden was appointed Chief Operating Officer in March 2024. Prior to that, Mr. Camden was the President of Rotor Riot and his 2023 compensation is based on his employment with Red Cat and Rotor Riot prior to the completion of our IPO and acquisitions in February 2024. |
| (5) | Amounts reflect the aggregate grant date fair value of restricted share grants computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 10 included in our consolidated financial statements. There can be no assurance that unvested awards will vest. |
| (6) | Option awards are valued in accordance with ASC 718, Compensation – Stock Compensation. Fair value is determined based on the Black-Scholes Model using inputs reflecting our estimates of expected volatility, term, discount rates, and dividend expectations. Compensation expense is recognized based on the vesting terms of the award. |
Outstanding Equity Awards at December 31, 2024
The table below summarizes outstanding equity awards held by our Named Executive Officers at December 31, 2024. All of the below awards were issued under the Plan.
| Stock Awards | |||
|---|---|---|---|
| Name | Grant Date | Number of Shares or Units of Stock That Have Not Yet Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) |
| Allan Evans* | 4/30/2024 | 77,089 | $1,296,637 |
| 05/02/2024 | 6,466 | 108,758 | |
| 11/05/2024 | – | – | |
| Brian Hoff | 04/30/2024 | 46,248 | $777,891 |
| 11/05/2024 | – | – | |
| Andrew Camden | 4/30/2024 | 7,899 | $132,861 |
| 11/05/2024 | – | – | |
| * | Awarded to 8 Consulting, LLC |
|---|---|
| (1) | The market value of shares or units of stock that have not yet vested is based on our stock price as of December 31, 2024. |
Employment Agreements
Employment Agreement relating to Dr. Allan Evans, Chief Executive Officer
On November 27, 2023, the Company and Dr. Allan Evans entered into an Offer Letter (the “Offer Letter”) under which Dr. Evans agreed to serve as the Company’s Chief Executive Officer effective December 4, 2023.
On April 30, 2024, the Company’s Board approved the Company entering into a two-year Management Services Agreement (the “Agreement”) with 8 Consulting LLC (the “Consultant”) for the services of our Chief Executive Officer, Dr. Allan Evans, whereby the Consultant agreed to cause Dr. Evans to perform his services as the Company’s Chief Executive Officer and the Consultant will be compensated on behalf of Dr. Evans by the Company in connection with his performance of such services. The Agreement allows Dr. Evans to receive favorable tax benefits as a resident of the Commonwealth of Puerto Rico who will perform such services in Puerto Rico. Pursuant to the Agreement, Dr. Evans will perform the duties and responsibilities that are customary for a chief executive officer of a public company that either have revenues similar to the Company on a pro forma basis as reflected in the Prospectus filed with the SEC on February 15, 2024, or if pre-revenues, are an active and on-going business that are performing pre-revenue activities. The Consultant agreed to cause Dr. Evans, as Chief Executive Officer, (i) to undertake primary responsibility for managing all aspects of the Company and overseeing the preparation of all reports, registration statements and other filings required filed by the Company with the SEC and executing the certifications required the Sarbanes Oxley Act of 2002 and the rules of the SEC as the principal executive officer of the Company; (ii) attend investor meetings and road shows in connection with the Company’s fundraising and investor relations activities; (iii) to report to the Company’s Board; (iv) to perform services for such subsidiaries of the Company as may be necessary.
The Consultant receives a $250,000 fee per year payable in monthly installments. In addition, the Consultant was granted 488,000 fully vested shares of restricted Common Stock. The fair value of the shares was $585,600 based on the $1.20 quoted trading price on the Grant Date and will be recognized over the service period (see below). The grant of restricted common stock was made under the Company’s 2022 Equity Incentive Plan. The Company and Dr. Evans previously entered into an Offer Letter dated November 27, 2023, under which he would serve as the Company’s Chief Executive Officer effective as of December 4, 2023. The Agreement terminates and replaces the Offer Letter dated November 27, 2023.
Employment Agreement with Brian Hoff, Chief Financial Officer
The Employment Agreement with Mr. Hoff effective November 1, 2022 provides that he will serve as the Chief Financial Officer of the Company on an at will basis. In August 2023, the Employment Agreement was amended (the “First Hoff Amendment”) to increase the percentage of RSUs from 1% to 3% (as discussed below). Pursuant to his Employment Agreement, Mr. Hoff receives an annual base salary of $250,000. In addition, Mr. Hoff’s Employment Agreement entitles him to the following:
| · | Eligibility to earn an annual bonus of 50% of his annual base salary based on key performance indicators, as set forth in a bonus plan that is to be established, approved, administered and determined by the Board and the Chief Executive Officer. |
| · | A cash and/or equity bonus of up to $125,000 including the bonus he received following the acquisition of Fat Shark and Rotor Riot. |
| · | A cash bonus and/or equity bonus equal to up to $125,000 upon the completion of a capital raise event, defined as a second offering, a private placement offering, an at-the-market offering, a private investment in public equity offering. |
| · | A grant of RSUs equal to 3% of the outstanding Common Stock of the Company (after giving effect to the First Hoff Amendment). The RSUs vested following the Closing of the IPO. |
Additionally, under his Employment Agreement, if Mr. Hoff is terminated by the Company without Cause or terminates his employment for Good Reason, he will be entitled to six months’ annual base salary and COBRA premiums, as well as accelerated vesting of 100% of the then unvested RSUs, if applicable.
For this purpose, Good Reason is generally defined as (i) any reduction in his base salary, (ii) any material diminution of his authorities, titles or offices, (iii) being required to report to anyone other than the Chief Executive Officer, (iv) a request by the Company to relocate, or (v) material breach of his Employment Agreement without cure after 30 days’ written notice.
Cause is generally defined as (i) failure to perform his material duties under the Employment Agreement, following 30 days’ written notice without cure, (ii) willful misconduct or gross negligence or breach of a fiduciary duty owed to the Company, (iii) conviction of our guilty pleas to a felony or other criminal offense involving moral turpitude, (iv) any act or omission involving dishonesty, disloyalty, or fraud causing or reasonably expected to cause significant economic harm to the Company, or (v) material breach of his Employment Agreement without cure after 30 days’ written notice.
Employment arrangement with Andrew Camden, Chief Operating Officer
Our Board appointed Mr. Camden, Chief Operating Officer on March 4, 2024, and agreed to pay him a salary of $150,000 per year. In September 2024, the Compensation Committee approved increasing Mr. Camden’s salary to $200,000.
Non-Employee Director Compensation
Our non-employee directors did not receive any cash or equity compensation from the Company for the year ended December 31, 2023.
Following our February 2024 IPO, our Board approved compensation for our non-employee directors. Our non-employee directors will receive annual aggregate compensation of $60,000 for service on the Board comprised of cash and equity grants. Additional compensation for the chairperson members as set forth below. All cash payments and equity grants will be made semi-annual in arrears.
| · | Audit Committee Chair: $5,000 |
| · | Compensation Committee Chair: $5,000 |
| · | Nominating and Governance Committee Chair: $5,000 |
All equity grants issued to our non-employee directors will be granted under our Plan.
On February 3, 2025, the Board determined that for 2025 non-employee directors will be granted $90,000 payable in restricted Common Stock with the number of shares determined based upon the closing price of the Company’s Common Stock during each open window period with the first grant equal to two-quarters of compensation on May 19, 2025 using the May 19 th closing price to determine the number of shares, the second quarter grant equal to 25% of the total using the August 19, 2025 closing price and the final grant of restricted stock using the November 19, 2025 closing price with all grants vested and the grants subject to continued service as of the grant date and execution of the Company’s standard Restricted Stock Agreement.
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