PART I FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The financial statements for June 30, 2025, reflect improved financial position, net income, and revenue growth, alongside increased cash used in operations and going concern doubts [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of June 30, 2025, shows significant improvement, with increased assets, reduced liabilities, and a shift from stockholders' deficit to equity Condensed Consolidated Balance Sheet Highlights (in $) | Metric | June 30, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | 14,096,172 | 10,947,505 | | **Total Assets** | 23,182,410 | 20,581,554 | | **Total Current Liabilities** | 4,990,894 | 7,886,891 | | **Total Liabilities** | 6,901,753 | 26,323,513 | | **Warrant Liabilities** | 128,000 | 16,400,000 | | **Total Stockholders' Equity (Deficit)** | 16,280,657 | (5,741,959) | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the six months ended June 30, 2025, the company achieved net income of **$5.8 million**, driven by a non-cash gain on warrant liabilities, alongside revenue and gross profit growth Statement of Operations Summary (Six Months Ended June 30) | Metric | 2025 (unaudited) | 2024 (unaudited) | | :--- | :--- | :--- | | **Revenues** | $7,846,970 | $7,286,985 | | **Gross Profit** | $4,473,695 | $3,508,997 | | **Loss from Operations** | ($3,070,172) | ($4,934,356) | | **Gain on change in fair value of warrant liabilities** | $8,506,000 | $0 | | **Net Income (Loss)** | $5,779,663 | ($9,245,295) | | **Net Income (Loss) Attributable to Common Stockholders** | $925,832 | ($14,613,733) | | **Net Income (Loss) per Share - Basic** | $0.07 | ($71.01) | [Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20(Deficit)) Stockholders' equity shifted from a deficit to a surplus of **$16.3 million** by June 30, 2025, driven by net income, preferred stock issuance, and warrant reclassification - The company transitioned from a stockholders' deficit of **$(5,741,959)** at the end of 2024 to a positive stockholders' equity of **$16,280,657** as of June 30, 2025[12](index=12&type=chunk) - Key financing activities in the first six months of 2025 included issuing **$4.5 million** in Series F Preferred Stock, receiving **$2.1 million** from the exercise of Series B Warrants, and converting **$1.4 million** of a convertible note into common stock[12](index=12&type=chunk) - A significant non-cash event was the reclassification of amended Series B warrants from liability to stockholders' equity, adding **$7.77 million** to additional paid-in capital[12](index=12&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flows for the six months ended June 30, 2025, show increased cash used in operations, offset by significant cash provided by financing activities, leading to a net cash increase Cash Flow Summary (Six Months Ended June 30) | Metric | 2025 (unaudited) | 2024 (unaudited) | | :--- | :--- | :--- | | **Net Cash Used in Operating Activities** | ($4,039,685) | ($2,983,430) | | **Net Cash Used in Investing Activities** | ($23,882) | ($92,995) | | **Net Cash Provided by Financing Activities** | $5,945,746 | $3,289,258 | | **Net Change in Cash** | $1,888,588 | $158,184 | | **Cash at End of Period** | $5,502,584 | $977,208 | [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail business operations, accounting policies, and significant financing events, including a going concern warning and segment reporting for Drones and Sensors - The company designs and delivers drones and sensors for various industries including energy, infrastructure, agriculture, and government[19](index=19&type=chunk) - Management has expressed substantial doubt about the Company's ability to continue as a going concern, as it will require additional liquidity to meet its financial obligations for the next 12 months[28](index=28&type=chunk) - The company operates in two primary segments: Drones and Sensors; the SaaS segment ceased operations in 2024[126](index=126&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses business, growth strategies, and financial results, noting revenue growth, a shift to net income, but also a working capital deficit and going concern doubts - The company's growth strategy focuses on leveraging its proprietary drone solutions, delivering new innovations, fostering an entrepreneurial culture, and pursuing strategic acquisitions[151](index=151&type=chunk)[153](index=153&type=chunk) - Competitive strengths include proprietary technologies, in-house manufacturing, a global reseller network, and numerous regulatory approvals and certifications, such as the GSA MAS Contract and EASA design verifications[152](index=152&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - As of June 30, 2025, the company does not have sufficient cash to meet its financial obligations for the next twelve months, leading to substantial doubt about its ability to continue as a going concern[179](index=179&type=chunk)[180](index=180&type=chunk) [Results of Operations](index=42&type=section&id=Results%20of%20Operations) For the first six months of 2025, revenues increased by **7.7%**, gross profit by **27.5%**, and the company achieved a net income of **$5.8 million**, largely due to a non-cash gain Revenue Comparison (Six Months Ended June 30) | Period | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | **Revenue** | $7,846,970 | $7,286,985 | +7.7% | Gross Profit Comparison (Six Months Ended June 30) | Period | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | **Gross Profit** | $4,473,695 | $3,508,997 | +27.5% | Operating Expense Comparison (Six Months Ended June 30) | Expense Category | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | **General & Administrative** | $4,506,980 | $5,041,763 | -10.6% | | **Research & Development** | $1,547,401 | $2,212,236 | -30.1% | | **Sales & Marketing** | $1,489,486 | $1,189,354 | +25.2% | [Cash Flows](index=43&type=section&id=Cash%20Flows) Cash flows for the six months ended June 30, 2025, show increased cash used in operations, offset by a significant rise in cash provided by financing activities - Cash used in operations increased by **35.4%** YoY for the six months ended June 30, 2025, primarily due to a reduction in outstanding accounts payable[175](index=175&type=chunk) - Cash provided by financing activities increased by **80.8%** YoY, mainly due to higher net proceeds from the exercise of Series B warrants and the issuance of Series F preferred stock[177](index=177&type=chunk)[178](index=178&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, AgEagle is exempt from providing quantitative and qualitative disclosures about market risk - The company is exempt from providing quantitative and qualitative disclosures about market risk because it qualifies as a smaller reporting company[182](index=182&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[183](index=183&type=chunk) - No material changes were made to the company's internal control over financial reporting during the six months ended June 30, 2025[184](index=184&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no legal proceedings during the period - There are no legal proceedings to report[186](index=186&type=chunk) [Item 1A. Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, AgEagle is exempt from providing risk factor disclosures in this report - The company is exempt from providing risk factor disclosures in this report as it is a smaller reporting company[187](index=187&type=chunk) [Item 2. Recent Sales of Unregistered Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Recent%20Sales%20of%20Unregistered%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no recent sales of unregistered equity securities - There were no recent sales of unregistered equity securities to report[188](index=188&type=chunk) [Item 6. Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, certifications, and XBRL data - The report includes a list of exhibits, such as corporate governance documents, certifications by the CEO and CFO, and interactive data files (XBRL)[192](index=192&type=chunk) Signatures [Signatures of Officers](index=48&type=section&id=Signatures%20of%20Officers) The report is signed and authorized by the Chief Executive Officer and Chief Financial Officer on August 14, 2025 - The Form 10-Q was signed on August 14, 2025, by William Irby (Chief Executive Officer) and Alison Burgett (Chief Financial Officer)[195](index=195&type=chunk)[196](index=196&type=chunk)

Core Insights - AgEagle Aerial Systems Inc. has launched the RedEdge-P Green camera, which aims to transform precision agriculture by providing high-resolution multispectral imaging from planting to harvest [1][3]. Product Features - The RedEdge-P Green camera offers high-quality data and modularity, enabling advanced deep learning capabilities for cost-effective imaging [2]. - It features unique spectral bands that provide insights into chlorophyll, carotenoids, and flavonoid content, enhancing tracking capabilities during critical harvest periods [4]. - The camera is available as a standalone unit or in paired configurations with the original RedEdge-P and RedEdge-P Blue, allowing users to leverage up to 15 noise-resistant spectral bands [5]. - It is NDAA-compliant and integrates seamlessly with various drone platforms, including a Calibrated Reflectance Panel and Downwelling Light Sensor for reliable data under varying light conditions [6]. Market Impact - The RedEdge-P Green camera is expected to empower agronomists and researchers to make data-driven decisions that enhance yields, reduce costs, and conserve natural resources [3]. - It provides a robust toolset for researchers, facilitating advanced studies and machine learning applications in crop health and environmental monitoring [10]. Production and Availability - Initial production of the RedEdge-P Green camera has commenced, with the first units expected to ship shortly [7].

Achievement demonstrates manufacturer's successful drive for excellence in drone production Wichita, Kan., Aug. 06, 2025 (GLOBE NEWSWIRE) -- AgEagle Aerial Systems Inc. (NYSE:UAVS), a leading provider of advanced drone and aerial imaging solutions, announces that its Switzerland facility has officially received ISO 9001 certification from third-party auditors following an intensive review of its Quality Management System in June. This prestigious recognition highlights AgEagle's unwavering dedication to qua ...

Core Insights - AgEagle Aerial Systems Inc. has made its first sale of the eBee VISION fixed-wing drone in Thailand, marking a significant expansion into Southeast Asia [1][4] - The eBee VISION drone offers advanced capabilities for real-time airborne surveillance, catering to emergency and security services [2] - The unmanned aerial system (UAS) market in Southeast Asia is projected to grow at a 14% compound annual growth rate (CAGR) over the next five years, driven by supportive government policies and decreasing ownership costs [3] Company Overview - AgEagle Aerial Systems Inc. is a global leader in drone technology, providing comprehensive solutions including drones, sensors, and software for various industries such as agriculture and public safety [5] - The company is headquartered in Wichita, Kansas, and is committed to delivering innovative unmanned aerial systems worldwide [5] Partner Insights - Sky Visual Imaging Venture (SkyVIV) is a key partner for AgEagle in Thailand, specializing in drone technology for agriculture, civil engineering, and security [6] - SkyVIV has been a trusted partner since 2012 and plays a significant role in promoting AgEagle's drones in the Thai market, particularly in the sugar industry [3][6]

Core Points - AgEagle Aerial Systems Inc. has achieved Blue UAS certification for its eBee VISION drone, following the certification of its eBee TAC, making both drones eligible for procurement by the U.S. Department of Defense and other federal agencies [1][2] - The Blue UAS certification signifies compliance with security and performance standards required by the DoD, facilitating faster acquisition and delivery of drone capabilities to the defense community [2][3] - The eBee VISION drone, weighing 3.3 pounds, offers up to 100 minutes of flight time, advanced imaging capabilities, and secure data transmission, making it suitable for tactical Intelligence, Surveillance, and Reconnaissance missions [4] Company Overview - AgEagle Aerial Systems, founded in 2010, specializes in designing and delivering advanced flight hardware, sensors, and software solutions for various industries, including energy, construction, agriculture, and government [6]

Core Insights - AgEagle Aerial Systems Inc. has achieved Blue UAS certification for its eBee TAC drone, making it eligible for procurement by the U.S. Department of Defense and other federal agencies, thus meeting required security and performance standards [1][2][3] Group 1: Certification and Compliance - The eBee TAC drone previously held Green UAS certification, which has now transitioned to Blue UAS Cleared status, streamlining secure drone acquisition for government applications [3] - The certification process involved collaboration between the Association for Uncrewed Vehicle Systems International, the Defense Innovation Unit, and federal stakeholders, aligning with Executive Order 14307 [3] Group 2: Product Features and Applications - The eBee TAC is a lightweight (3.5 pounds), hand-launched, fixed-wing drone designed for tactical mapping and reconnaissance, offering up to 90 minutes of flight time and secure data sharing capabilities [4] - The drone's features align with the U.S. Defense Secretary's call for low-cost, expendable drones suitable for squad-level operations [4] Group 3: Company Background - Founded in 2010, AgEagle Aerial Systems specializes in advanced drone and aerial imaging solutions, initially focusing on the agriculture industry and now serving various sectors including energy, construction, and government [5]

Core Insights - AgEagle Aerial Systems Inc. has partnered with Atvos Agroindustrial S.A. to deploy five advanced eBee X drones integrated with S.O.D.A. 3D mapping cameras, showcasing the scalability and impact of AgEagle's technology on agricultural efficiency and sustainability [1][2] Company Overview - AgEagle is a leading provider of advanced drone and aerial imaging solutions, focusing on delivering full stack UAS, sensors, and software solutions across various industries including agriculture, energy, and construction [5] Partnership Details - The partnership with Atvos aims to enhance productivity, improve environmental stewardship, and reduce operational costs across Atvos' 1.2 million acres of sugarcane [2][4] - Atvos has made a significant investment of R$11 billion (approximately USD $1.89 billion) in its New Business division to diversify and scale its biofuel portfolio, reflecting a commitment to innovation and sustainable growth [4] Technological Impact - Drone flights conducted 60 to 90 days after planting produce precision maps with a spatial resolution of 3 cm, which integrate with agricultural machinery autopilot systems, improving travel accuracy to within 15 cm and minimizing crop damage and soil compaction [3] - Initial results indicate an estimated 5% increase in sugarcane yields due to the deployment of AgEagle's technologies [3] Operational Enhancements - Atvos utilizes high-resolution drone imagery and proprietary algorithms to identify gaps in planting greater than 50 cm, generating failure index reports that enhance the quality and efficiency of mechanized operations [7] - Pre-harvest drone mapping allows Atvos to locate weed concentrations in dense cane fields, enabling targeted herbicide application by drone, which significantly reduces chemical usage and lowers costs while minimizing environmental impact [7]

Core Insights - AgEagle Aerial Systems Inc. has partnered with Atvos Agroindustrial S.A. to deploy five advanced eBee X drones integrated with S.O.D.A. 3D mapping cameras, showcasing the scalability and impact of AgEagle's technology on agricultural efficiency and sustainability [1][2] Company Overview - AgEagle Aerial Systems Inc. is a leading provider of advanced drone and aerial imaging solutions, focusing on full stack UAS, sensors, and software solutions for various industries including agriculture, energy, and government [5] Partnership Details - Atvos, one of Brazil's largest producers of sugarcane-based ethanol, is utilizing AgEagle's drone technologies to enhance productivity, improve environmental stewardship, and reduce operational costs across its 1.2 million acres of sugarcane [2][4] - The partnership aligns with Atvos' recent R$11 billion (USD $1.89 billion) investment in its New Business division to diversify and scale its biofuel portfolio [4] Technological Impact - Drone flights conducted 60 to 90 days after planting produce precision maps with a spatial resolution of 3 cm, improving travel accuracy of agricultural machinery to within 15 cm, which minimizes crop damage and soil compaction [3] - Initial results indicate an estimated 5% increase in sugarcane yields due to the deployment of AgEagle's technology [3] Operational Enhancements - Atvos employs high-resolution drone imagery and proprietary algorithms to identify gaps in planting greater than 50 cm, generating failure index reports that enhance mechanized operations [7] - Pre-harvest drone mapping allows Atvos to locate weed concentrations, enabling targeted herbicide application by drone, which significantly reduces chemical usage and lowers costs while minimizing environmental impact [7]

Core Insights - AgEagle Aerial Systems Inc. has partnered with Atvos Agroindustrial S.A. to deploy five advanced eBee X drones, enhancing agricultural efficiency and sustainability in Brazil's biofuel sector [1][2] Company Overview - AgEagle specializes in advanced drone and aerial imaging solutions, focusing on agricultural applications and expanding into various sectors including energy and infrastructure [5] Partnership Details - Atvos is utilizing AgEagle's drone technologies across its 1.2 million acres of sugarcane to improve productivity, environmental stewardship, and reduce operational costs [2][4] - The partnership aims to enhance agricultural practices through precision mapping and data-driven decision-making [2] Technological Impact - Drone flights produce precision maps with a spatial resolution of 3 cm, improving machinery travel accuracy to within 15 cm, which minimizes crop damage and soil compaction [3] - Initial results indicate a potential 5% increase in sugarcane yields due to the implementation of these technologies [3] Investment and Growth - Atvos has made a significant investment of R$11 billion (approximately USD $1.89 billion) in its New Business division to diversify and scale its biofuel portfolio, reflecting a commitment to innovation and sustainable growth [4] Operational Enhancements - AgEagle's drone imagery and algorithms help Atvos identify planting gaps greater than 50 cm, improving mechanized operations [7] - Pre-harvest drone mapping allows for targeted weed control, reducing herbicide usage and environmental impact [7]

Core Insights - AgEagle Aerial Systems Inc. has partnered with Atvos Agroindustrial S.A. to deploy five advanced eBee X drones integrated with MicaSense™ S.O.D.A. 3D mapping cameras, enhancing agricultural efficiency and sustainability in Brazil's biofuel sector [1][2] Company Overview - AgEagle is a leading provider of advanced drone and aerial imaging solutions, focusing on full stack UAS, sensors, and software solutions for various industries including agriculture, energy, and government [5] Partnership Details - Atvos is utilizing AgEagle's drone technologies across its 1.2 million acres of sugarcane to improve productivity, environmental stewardship, and reduce operational costs [2][4] - The partnership aims to enhance agricultural practices through precision mapping and data-driven decision-making [2] Technological Impact - Drone flights conducted 60 to 90 days post-planting yield precision maps with a spatial resolution of 3 cm, improving machinery travel accuracy to within 15 cm and potentially increasing sugarcane yields by an estimated 5% [3] - High-resolution drone imagery is used for crop failure analysis, identifying gaps in planting greater than 50 cm, which enhances mechanized operations [7] Environmental and Economic Benefits - The deployment of AgEagle's systems aligns with Atvos' R$11 billion (USD $1.89 billion) investment in diversifying its biofuel portfolio, reflecting a commitment to innovation and sustainable growth [4] - Targeted weed control through pre-harvest drone mapping allows for precise herbicide application, significantly reducing chemical usage and costs while minimizing environmental impact [7]