Note 8 – Operating Leases

The Company has assumed in the February 2024 business combination of Rotor Riot, a five-year operating lease for approximately 6,900 square feet of warehouse and office space in Orlando, Florida. The lease commenced in November 2023 and expires in October 2028. The Company has valued the Right of Use Asset (“ROUA”) and the associated liability, as of February 16, 2024, at $378,430. Operating lease expense totaled $78,859 and $78,859, respectively for the nine months ended September 30, 2026 and 2025. A total of $78,859 was recorded to costs of goods sold for the nine months ended September 30, 2026.

In June 2025, Unusual Machines signed a lease agreement for an additional 17,000 square feet of warehouse/office space in Orlando, FL. This space will be used primarily for motor production. The lease commencement date is August 1, 2025 and currently runs through August 21, 2030. The Company has valued the ROUA and the associated liability, as of August 1, 2025, at $973,443. Operating lease expense totaled $190,293 and $42,287, respectively for the nine months ended September 30, 2026 and 2025. A total of $190,293 was recorded to cost of goods sold for the nine months ended September 30, 2026.

In October 2025, Unusual Machines signed a lease agreement for an additional 25,000 square feet of warehouse/office space in Orlando, FL. This space will be used primarily for order fulfillment and inventory storage. The lease commencement date is December 1, 2025 and currently runs through December 31, 2030. The Company has valued the ROUA and the associated liability, as of December 1, 2025, at $1,430,522. Operating lease expense totaled $279,645 and $0, respectively for the nine months ended September 30, 2026 and 2025.

On December 15, 2025, the Company parent entity entered into a three-year operating lease agreement for an additional 4,500 square feet of space in Orlando, FL. This space will be used for headset production. The lease commenced on January 1, 2026 and expires in December 2028. The Company has valued the ROUA and the associated liability, as of January 1, 2026, at $204,749. Operating lease expense totaled $57,949 and $0, respectively for the nine months ended September 30, 2026 and 2025. A total of $56,441 was recorded to cost of goods sold for the nine months ended September 30, 2026.

On December 10, 2025, the Company parent entity entered into a three-year operating lease agreement for an additional 9,125 square feet of space in Orlando, FL. This space will be used as the Company’s corporate headquarters. The lease commenced on January 1, 2026 and expires in February 2029. In addition, the Company executed an amendment on September 4, 2026 for an additional 10,264 square feet. The Company has valued the ROUA and the associated liability, as of February 1, 2026, at $1,346,610. Operating lease expense totaled $194,698 and $0, respectively for the nine months ended September 30, 2026 and 2025.

The Company has assumed in the acquisition of Rotor Lab on September 3, 2025, a three-year operating lease of warehouse and office space in Canberra, Australia. The leased commenced in May 2024 and expires in April 2027. The Company has valued the ROUA and the associated liability, as of September 3, 2025, at $58,524. Operating lease expense totaled $44,483 and $3,271, respectively for the nine months ended September 30, 2026 and 2025.

The following is a summary of the operating lease right-of-use assets and liabilities at September 30, 2026:

The following is a summary of future lease payments required under the lease agreement:

During the nine months ended September 30, 2026, the Company commenced new lease arrangements resulting in the recognition of operating lease right-of-use assets and corresponding operating lease liabilities of $1.6M. These additions represent noncash activities and, accordingly, are excluded from the consolidated statements of cash flows.