From July to mid-August sensor and sensor-related purchase orders total approximately $800,000 WICHITA, Kan., Aug. 22, 2024 (GLOBE NEWSWIRE) -- AgEagle Aerial Systems Inc. (NYSE American: UAVS) ("AgEagle" or the "Company"), an industry-leading provider of full stack flight hardware, sensors and software for commercial and government use, announces the Company has received numerous purchase orders totaling approximately $800,000 of sensors and sensor-related accessories through its network of Value Added Res ...

From July to mid-August sensor and sensor-related sales total $833,610 WICHITA, Kan., Aug. 22, 2024 (GLOBE NEWSWIRE) -- AgEagle Aerial Systems Inc. (NYSE American: UAVS) ("AgEagle" or the "Company"), an industry-leading provider of full stack flight hardware, sensors and software for commercial and government use, announces the Company has sold $833,610 of sensors and sensor-related accessories through its vast network of Value Added Resellers ("VAR") from July 1, 2024 to Aug 15, 2024. The Company closed sa ...

Core View - AgEagle Aerial Systems showed notable progress in Q2 2024, with a significant reduction in net loss per share and a modest revenue increase driven by cost-control measures and operational efficiency [1][3] - The company is focusing on high-growth sectors like defense and security while pursuing additional funding to sustain operations and drive growth [2] Q2 Results - Net loss per share improved to 24 cents in Q2 2024 from $1.10 in the prior-year quarter [3] - Revenues increased by 3.5% to $3.39 million from $3.28 million in the prior-year quarter [3] - The reduction in losses was supported by cost-control measures and a diversified product portfolio [3] Segmental Performances - Drones segment revenues grew 7.5% to $1.35 million, driven by higher sales of eBee drone products [4] - Sensors segment revenues increased 3.7% to $1.95 million, fueled by strong demand for panchromatic sensor series like RedEdge and Altum [5] - SaaS segment revenues declined to $88,590 from $0.14 million due to decreased subscription services for Ground Control platforms [6] Profitability - Net loss improved to $2.93 million from $5.29 million in the prior-year quarter, driven by reduced inventory purchases and a favorable cost structure [7] - Operating loss decreased to $2.54 million from $4.87 million [8] - Gross profit margin declined to 36.4% from 39.1%, but gross profit increased to $1.55 million from $1.03 million [8] Costs - Operating expenses decreased by 30.6% to $4.10 million, with general and administrative expenses falling 32.6% to $2.36 million and R&D costs declining 21% to $1.08 million [9] Cash & Debt - Cash reserves improved to $0.98 million as of Jun 30, 2024, from $0.82 million at the end of 2023 [10] - Total assets declined slightly to $22.8 million, with inventories decreasing 8% to $6.38 million and accounts receivable falling 25.2% to $1.54 million [11] - Total liabilities increased marginally to $14.8 million from $14.5 million [11] Management's View - Management emphasized the need for additional liquidity to meet financial obligations and is pursuing strategies to secure funding and streamline operations [12] Other Developments - The company amended agreements with Alpha Capital Anstalt to improve financial flexibility and support long-term strategic initiatives [13] - AgEagle is focusing on expanding its market reach in defense and security sectors, capitalizing on the demand for drone surveillance [14] - The company is exploring growth opportunities through acquisitions targeting advanced technologies and strong intellectual property portfolios [15]

Delivery of the initial 20 of 49 systems effectuates the largest single purchase order in Company history WICHITA, Kan., Aug. 20, 2024 (GLOBE NEWSWIRE) -- AgEagle Aerial Systems Inc. (NYSE American: UAVS) ("AgEagle" or the "Company"), an industry-leading provider of full stack flight hardware, sensors and software for commercial and government use, announces the delivery of the first 20 eBee VISION systems to its reseller for French Army surveillance operations. Each system consists of an eBee VISION UAV, g ...

WICHITA, Kan., July 25, 2024 (GLOBE NEWSWIRE) -- AgEagle Aerial Systems Inc. (NYSE:UAVS) ("AgEagle" or the "Company"), an industry-leading provider of best-in-class full stack flight hardware, sensors, and software for commercial and government use, announces that the Company has recently completed a training exhibition for key defense and public safety partners in the U.S.: Darley, GeoAcuity, Hexagon US Federal, and Tough Stump Technologies. Bill Irby, AgEagle's CEO, commented, "The advanced capabilities o ...

Financial Performance - First-quarter 2024 revenues declined to $3.9 million from $4.1 million the previous year, primarily due to a 42% year-over-year drop in sales of the eBee drone series and a 5.4% fall in SaaS revenues [1] - The company posted an operating loss of $2.4 million in the first quarter of 2024, highlighting operational inefficiencies and market challenges [1] - Net cash used in operating activities amounted to $1.55 million for the quarter ended on Mar 31, 2024, with a working capital deficit of $1.97 million, raising doubts about long-term sustainability [9] Financial Risks and Challenges - Significant debt obligations, including a $4.75-million convertible note due January 2025, create financial strain [2] - High inventory levels and frequent stock issuances have led to shareholder dilution and declining investor confidence [10] - A recent 1-for-20 reverse stock split has exacerbated concerns about financial instability [10] - Customer concentration risks are significant, with one customer accounting for 10.1% of total accounts receivable in 2023 [6] Growth Drivers and Market Positioning - Strategic acquisitions in 2021 expanded the company's product portfolio, integrating advanced UAS, sensors, and software solutions [3] - Flagship products, such as the eBee series drones and Altum-PT sensors, cater to diverse industries, enhancing market presence [3] - The company has a robust global network and manufacturing operations in the United States and Switzerland, positioning it well to serve international markets [11] - Regulatory milestones, including approvals for Beyond Visual Line of Sight and Operations Over People in multiple regions, have been achieved [11] Valuation and Market Response - The company's stock valuation reflects its financial struggles, trading at a significant discount compared with industry peers [4] - The market has responded negatively to the company's financial instability, resulting in a steep decline in its stock price over the past year [4] Industry and Company Overview - Founded in 2010, the company designs and delivers drones, sensors, and software solutions for various industries, including agriculture, military, public safety, and utilities [7] - Despite its broad product portfolio and significant market presence, financial challenges overshadow its operational achievements [7]

Drones performed optimally over three days at Fort Irwin in the Mojave Desert Bill Irby, CEO of AgEagle, commented, "The extreme heat of the Mojave Desert presents a very challenging environment for electronic platforms to operate successfully. As expected, our eBee VISION and eBee TAC units performed with no issues over three days and were able to conduct multiple Beyond Visual Line of Sight (BLVOS) flights on the standard antenna configuration." For more information on the eBee VISION and eBee TAC visit: ...

Core Insights - AgEagle Aerial Systems Inc. has secured a purchase order for 20 eBee VISION full-stack systems valued at approximately $2 million for fiscal year 2024, aimed at enhancing public safety and security in the UAE [1][2] Company Overview - AgEagle Aerial Systems Inc. specializes in providing full stack flight hardware, sensors, and software for commercial and government applications, originally focusing on the agriculture sector [2] - The company has evolved to serve various industries including energy, construction, agriculture, and government, establishing itself as a leading provider of drone solutions [2] Product Details - The eBee VISION system is designed for intelligence, surveillance, and reconnaissance missions, featuring extended range and increased flight time, making it suitable for the public safety and security sector [3]

PART I – FINANCIAL INFORMATION This section presents AgEagle's unaudited financial statements, management's analysis, market risk, and controls [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents AgEagle Aerial Systems Inc.'s unaudited condensed consolidated financial statements for the three months ended March 31, 2024 and 2023, including balance sheets, statements of operations and comprehensive loss, statements of changes in stockholders' equity, and statements of cash flows, along with detailed notes explaining business operations, accounting policies, and specific financial line items [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the company's financial position, including assets, liabilities, and equity, as of specific dates Balance Sheet Summary | ASSETS (as of) | March 31, 2024 | December 31, 2023 | | :----------------------- | :------------- | :---------------- | | Cash | $822,921 | $819,024 | | Accounts receivable, net | $1,351,355 | $2,057,546 | | Inventories, net | $6,438,206 | $6,936,980 | | Total current assets | $9,333,127 | $10,547,111 | | Total assets | $23,221,107 | $25,155,901 | | LIABILITIES (as of) | | | | Accounts payable | $2,647,583 | $3,062,794 | | Convertible note | $4,749,491 | $4,504,500 | | Total current liabilities | $11,299,123 | $11,031,432 | | Total liabilities | $14,168,187 | $14,458,345 | | STOCKHOLDERS' EQUITY (as of) | | | | Total stockholders' equity | $9,052,920 | $10,697,556 | - Total assets decreased by approximately **$1.93 million** from December 31, 2023, to March 31, 2024[10](index=10&type=chunk) - Total stockholders' equity decreased by approximately **$1.64 million** from December 31, 2023, to March 31, 2024[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Details the company's revenues, expenses, and net loss for the reported periods Operations and Comprehensive Loss Summary | Metric (Three Months Ended March 31) | 2024 | 2023 | | :----------------------------------- | :----------- | :----------- | | Revenues | $3,894,447 | $4,057,069 | | Cost of sales | $1,940,025 | $2,078,437 | | Gross Profit | $1,954,422 | $1,978,632 | | Total operating expenses | $4,348,310 | $6,139,740 | | Loss from operations | $(2,393,888) | $(4,161,108) | | Total other expense, net | $(3,921,699) | $(438,391) | | Net loss attributable to common stockholders | $(6,315,587) | $(4,599,499) | | Net loss per common share - basic and diluted | $(0.77) | $(1.03) | | Total comprehensive loss, net of tax | $(6,479,240) | $(4,504,895) | - Revenues decreased by **4.0%** year-over-year, from **$4.06 million** in Q1 2023 to **$3.89 million** in Q1 2024[11](index=11&type=chunk) - Net loss increased by **37.3%** year-over-year, from **$(4.60 million)** in Q1 2023 to **$(6.32 million)** in Q1 2024, primarily due to a significant increase in other expenses, net[11](index=11&type=chunk) - Operating expenses decreased by **29.2%** year-over-year, from **$6.14 million** in Q1 2023 to **$4.35 million** in Q1 2024[11](index=11&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) Outlines changes in the company's equity accounts over the reporting periods - As of March 31, 2024, total stockholders' equity was **$9.05 million**, down from **$10.70 million** as of December 31, 2023[14](index=14&type=chunk) - The Company effected a **1-for-20** reverse stock split on February 9, 2024, retroactively adjusting all share and per share data[13](index=13&type=chunk)[23](index=23&type=chunk) - A deemed dividend of **$5.25 million** was recognized in Q1 2024 due to anti-dilution provisions triggered by a reduced warrant exercise price, increasing net loss available to common stockholders[13](index=13&type=chunk)[110](index=110&type=chunk)[112](index=112&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes the cash inflows and outflows from operating, investing, and financing activities Cash Flow Summary | Cash Flow Activity (Three Months Ended March 31) | 2024 | 2023 | | :----------------------------------------------- | :----------- | :----------- | | Net cash used in operating activities | $(1,553,093) | $(4,189,928) | | Net cash used in investing activities | $(43,081) | $(254,191) | | Net cash provided by financing activities | $1,641,894 | $2,955,402 | | Net change in cash | $3,897 | $(1,501,929) | | Cash at end of period | $822,921 | $2,847,908 | - Cash used in operating activities decreased by **62.9%** year-over-year, from **$4.19 million** in Q1 2023 to **$1.55 million** in Q1 2024, primarily due to lower operating expenses and inventory purchases[18](index=18&type=chunk)[190](index=190&type=chunk) - Cash provided by financing activities decreased by **44.4%** year-over-year, from **$2.96 million** in Q1 2023 to **$1.64 million** in Q1 2024, mainly due to less common stock sales and warrant exercises in the prior year, partially offset by preferred stock sales[18](index=18&type=chunk)[192](index=192&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations of accounting policies and specific financial statement line items [Note 1 – Description of the Business and Basis of Presentation](index=8&type=section&id=Note%201%20%E2%80%93%20Description%20of%20the%20Business%20and%20Basis%20of%20Presentation) Describes AgEagle's business, operations, and the basis for financial statement presentation - AgEagle designs and delivers drones, sensors, and software for various industries including energy/utilities, infrastructure, agriculture, and government[20](index=20&type=chunk) - The Company completed a **1-for-20** reverse stock split effective February 9, 2024[23](index=23&type=chunk) - The Company has an accumulated deficit of **$177.15 million** and a working capital deficit of **$1.97 million** as of March 31, 2024, raising substantial doubt about its ability to continue as a going concern[29](index=29&type=chunk) [Note 2 – Summary of Significant Accounting Policies](index=9&type=section&id=Note%202%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) Outlines the key accounting principles and methods used in preparing the financial statements - The Company's revenue is primarily derived from sales of drones, sensors, and software subscriptions, recognized when performance obligations are satisfied[44](index=44&type=chunk)[45](index=45&type=chunk) - Goodwill balance remained at **$7.40 million** as of March 31, 2024, and December 31, 2023, with impairment tests performed annually or sooner if circumstances indicate[56](index=56&type=chunk) - The Company operates in four segments: Drones, Sensors, Software as a Service (SaaS), and Corporate[67](index=67&type=chunk) [Note 3 – Balance Sheets](index=15&type=section&id=Note%203%20%E2%80%93%20Balance%20Sheets) Provides detailed breakdowns and explanations for specific balance sheet accounts Balance Sheet Details | Account | March 31, 2024 | December 31, 2023 | | :-------------------------- | :------------- | :---------------- | | Accounts receivable, net | $1,351,355 | $2,057,546 | | Inventories, net | $6,438,206 | $6,936,980 | | Property and equipment, net | $666,152 | $799,892 | | Intangible assets, net | $2,456,592 | $2,615,281 | | Accrued liabilities | $1,690,640 | $1,944,352 | - Accounts receivable, net, decreased by **$706,191** (**34.3%**) from December 31, 2023, to March 31, 2024[71](index=71&type=chunk) - Amortization expense for intangible assets was **$179,372** for Q1 2024, significantly lower than **$900,641** for Q1 2023[77](index=77&type=chunk) [Note 4 – COVID Loans](index=17&type=section&id=Note%204%20%E2%80%93%20COVID%20Loans) Details the company's assumed COVID-related loans and their repayment status - The Company assumed senseFly COVID Loans totaling **$665,225** as of March 31, 2024[81](index=81&type=chunk) - Payments on senseFly COVID Loans aggregated **$160,514** for Q1 2024, compared to **$44,598** for Q1 2023[81](index=81&type=chunk) - One COVID loan repayment period was extended from December 2023 to June 2025[81](index=81&type=chunk) [Note 5 – Promissory Note and Exchange Agreement](index=18&type=section&id=Note%205%20%E2%80%93%20Promissory%20Note%20and%20Exchange%20Agreement) Explains the terms and accounting impact of the convertible note and related agreements - On February 8, 2024, the Company exchanged a Promissory Note for a Convertible Note of **$4.85 million** due January 8, 2025, with an initial conversion price of **$2.00** per share, adjusted to **$1.25** after the reverse stock split[90](index=90&type=chunk) - The Convertible Note accrues interest at **12%** per annum, increasing to **18%** upon an Event of Default[90](index=90&type=chunk) - On March 6, 2024, the conversion price was further reduced to **$0.60** due to dilution protection, resulting in **$3.49 million** in interest expense for the incremental value[95](index=95&type=chunk) [Note 6 – Other Short-Term Loan](index=20&type=section&id=Note%206%20%E2%80%93%20Other%20Short-Term%20Loan) Describes the terms and financial impact of a future receipts agreement - On January 24, 2024, the Company entered into a Future Receipts Agreement, selling **$1.51 million** in future receipts for **$1.05 million**, receiving net proceeds of **$1.00 million**[96](index=96&type=chunk) - The Company recorded a debt discount of **$512,000**, amortizing **$164,572** as interest expense in Q1 2024[96](index=96&type=chunk)[98](index=98&type=chunk) - As of March 31, 2024, the total outstanding balance under this loan is **$1.03 million**, with an unamortized debt discount of **$347,428**[98](index=98&type=chunk) [Note 7 – Stockholders' Equity](index=21&type=section&id=Note%207%20%E2%80%93%20Stockholders%27%20Equity) Details changes in stockholders' equity, including stock-based compensation and warrant exercises - On March 6, 2024, the Company received **$497,701** from the exercise of **829,500** warrants at a reduced exercise price of **$0.60** per share[101](index=101&type=chunk) - The reduced warrant exercise price triggered anti-dilution provisions, resulting in a **$5.25 million** deemed dividend reflected in stockholders' equity and increasing net loss available to common stockholders[110](index=110&type=chunk)[112](index=112&type=chunk) - Stock-based compensation expense decreased significantly from **$512,529** in Q1 2023 to **$18,580** in Q1 2024[115](index=115&type=chunk) [Note 8 – Leases](index=25&type=section&id=Note%208%20%E2%80%93%20Leases) Provides information on the company's lease arrangements, right-of-use assets, and lease liabilities Lease Metrics | Lease Metric | March 31, 2024 | December 31, 2023 | | :---------------------------------- | :------------- | :---------------- | | Right-of-use-assets | $3,112,824 | $3,525,406 | | Current portion of lease liabilities | $873,344 | $901,925 | | Long-term portion lease liabilities | $2,336,393 | $2,721,743 | | Weighted-average remaining lease terms (in years) | 3.7 | 3.9 | | Weighted-average discount rate | 6.1% | 6.1% | - Operating lease expense payments were **$245,050** for Q1 2024, a slight decrease from **$261,480** for Q1 2023[134](index=134&type=chunk) [Note 9 – Warrants](index=26&type=section&id=Note%209%20%E2%80%93%20Warrants) Details the outstanding warrants, their exercise prices, and the impact of anti-dilution provisions - As of March 31, 2024, **3,370,301** warrants were outstanding and exercisable, with a weighted average exercise price of **$2.13** and a remaining contractual term of **4.06** years[145](index=145&type=chunk) - The reduction in warrant exercise price to **$0.60** on March 6, 2024, triggered down round provisions, leading to a deemed dividend (as detailed in Note 7)[139](index=139&type=chunk)[144](index=144&type=chunk) [Note 10 – Commitments and Contingencies](index=28&type=section&id=Note%2010%20%E2%80%93%20Commitments%20and%20Contingencies) Discloses the company's purchase commitments and other potential liabilities - As of March 31, 2024, the Company had purchase commitments of **$2.67 million**, expected to be realized during the year ending December 31, 2024[153](index=153&type=chunk) - The Company entered into an exclusive engagement letter with Dawson James Securities, Inc. on March 6, 2024, for equity and equity-linked securities offerings, including warrants to Dawson[151](index=151&type=chunk)[152](index=152&type=chunk) [Note 11 – Segment Information](index=28&type=section&id=Note%2011%20%E2%80%93%20Segment%20Information) Presents financial data broken down by the company's operating segments and geographic regions Segment Performance | Segment (Three Months Ended March 31, 2024) | Revenues | Net Income (Loss) | | :------------------------------------------ | :--------- | :---------------- | | Drones | $1,146,612 | $(1,925,563) | | Sensors | $2,633,540 | $878,507 | | SaaS | $114,295 | $(421,039) | | Corporate | $0 | $(4,847,492) | | Total | $3,894,447 | $(6,315,587) | - Sensor segment revenues increased from **$1.97 million** in Q1 2023 to **$2.63 million** in Q1 2024, while Drone revenues decreased from **$1.97 million** to **$1.15 million**[156](index=156&type=chunk) - Europe, Middle East and Africa (EMEA) was the largest geographic revenue contributor in Q1 2024 with **$1.69 million**, followed by North America with **$1.48 million**[156](index=156&type=chunk) [Note 12 – Subsequent Events](index=30&type=section&id=Note%2012%20%E2%80%93%20Subsequent%20Events) Reports significant events that occurred after the balance sheet date - From April 1 to May 15, 2024, Alpha converted **835** shares of Series F Preferred Stock into **1,391,667** shares of Common Stock[158](index=158&type=chunk) - Effective April 15, 2024, William Irby was appointed Chief Executive Officer and Director, with an annual base salary of **$375,000** and eligibility for RSU sign-on and performance bonuses[160](index=160&type=chunk)[161](index=161&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=31&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on AgEagle's financial condition, results of operations, liquidity, and capital resources for the three months ended March 31, 2024, compared to the same period in 2023. It highlights the Company's strategic focus on defense and security markets, product innovation, and challenges related to liquidity and global economic factors [Overview](index=31&type=section&id=Overview) Provides a general introduction to AgEagle's business, strategic focus, and market position - AgEagle, through its subsidiaries, designs and delivers drones, sensors, and software, expanding from agriculture to defense, security, and commercial markets[164](index=164&type=chunk) - The Company has achieved regulatory approvals for its commercial and tactical drones to fly Beyond Visual Line of Sight (BVLOS) and/or Operations Over People (OOP) in multiple regions[165](index=165&type=chunk) - AgEagle is focused on growing its business, generating cash, and preserving its leadership position through new product development and strategic acquisitions[167](index=167&type=chunk) [Key Growth Strategies](index=31&type=section&id=Key%20Growth%20Strategies) Outlines the company's strategic initiatives for business expansion and market penetration - The Company intends to shift priority to a laser-like focus on the higher volume defense & security market while continuing to grow in precision agriculture and other civil/commercial markets[170](index=170&type=chunk) - AgEagle plans to deliver new and innovative solutions through continued investment in R&D and foster an entrepreneurial culture[170](index=170&type=chunk) - Growth through acquisition of technologically advanced companies and intellectual property is a key component of the strategy[170](index=170&type=chunk) [Competitive Strengths](index=32&type=section&id=Competitive%20Strengths) Highlights AgEagle's core advantages, including technology, manufacturing, and regulatory achievements - AgEagle possesses proprietary technologies, in-house manufacturing capabilities, and a workforce primarily composed of experienced engineers and data scientists[169](index=169&type=chunk) - The eBee X series drones were the first commercial drones to receive C2 class identification label in accordance with EASA regulations, allowing flights closer to uninvolved people[171](index=171&type=chunk) - The eBee TAC UAS is available for purchase by all U.S. military branches and government agencies, including through the Company's GSA Schedule Contract[174](index=174&type=chunk) - In March 2024, AgEagle was selected to provide **50** RedEdge-P cameras to Greece's Hellenic Republic Ministry of Rural Development for agricultural monitoring[178](index=178&type=chunk) [Impact of the Risks and Uncertainties On Our Business Operations](index=35&type=section&id=Impact%20of%20the%20Risks%20and%20Uncertainties%20On%20Our%20Business%20Operations) Discusses how global economic factors and supply chain issues affect the company's operations - Global economic challenges, including war, pandemics, rising inflation, and supply-chain disruptions, continue to impact the UAV industry and AgEagle's operations[179](index=179&type=chunk) - The Company's ability to access components, parts, and labor for manufacturing proprietary drones and sensors has been, and continues to be, impacted[179](index=179&type=chunk) [Three Months Ended March 31, 2024 as Compared to Three Months Ended March 31, 2023](index=36&type=section&id=Three%20Months%20Ended%20March%2031%2C%202024%20as%20Compared%20to%20Three%20Months%20Ended%20March%2031%2C%202023) Provides a comparative analysis of financial performance for the specified periods [Revenues](index=36&type=section&id=Revenues) Analyzes the changes in revenue streams and their underlying drivers - Revenues decreased by **$162,622** (**4.0%**) to **$3.89 million** in Q1 2024, compared to **$4.06 million** in Q1 2023[181](index=181&type=chunk) - Sensor sales increased by **$663,345**, offset by an **$819,830** decline in eBee drone product revenues and a **$6,137** decrease in SaaS subscription services[181](index=181&type=chunk) - Drone declines are attributed to customers postponing purchases until the eBee VISION release in September 2023, and longer purchase cycles for VARs and military contracts[181](index=181&type=chunk) [Cost of Sales and Gross Profit](index=36&type=section&id=Cost%20of%20Sales%20and%20Gross%20Profit) Examines the trends in cost of sales and their impact on gross profit margins - Cost of sales decreased by **$138,412** (**6.7%**) to **$1.94 million** in Q1 2024[182](index=182&type=chunk) - Gross profit decreased by **$24,210** (**1.2%**) to **$1.95 million** in Q1 2024[182](index=182&type=chunk) - The decrease in gross profit was due to declining revenues from sensor and drone products, significant price reductions to stimulate demand, and supply chain pressures on sensor sales[182](index=182&type=chunk) [Operating Expenses](index=36&type=section&id=Operating%20Expenses) Discusses the changes and drivers of the company's total operating expenses - Total operating expenses decreased by **$1.79 million** (**29.2%**) to **$4.35 million** in Q1 2024[183](index=183&type=chunk) [General and Administrative Expenses](index=36&type=section&id=General%20and%20Administrative%20Expenses) Details the factors influencing general and administrative costs - General and administrative expenses decreased by **$896,864** (**25.1%**) to **$2.68 million** in Q1 2024, primarily due to less stock compensation expense and reduced stock price, partially offset by legal fees[184](index=184&type=chunk) [Research and Development](index=36&type=section&id=Research%20and%20Development) Explains the changes in research and development expenditures - Research and development expenses decreased by **$452,114** (**28.6%**) to **$1.13 million** in Q1 2024, due to the integration of R&D teams and a reduction in consultants and internal headcounts[185](index=185&type=chunk) [Sales and Marketing](index=36&type=section&id=Sales%20and%20Marketing) Analyzes the trends and drivers of sales and marketing expenses - Sales and marketing expenses decreased by **$442,452** (**45.2%**) to **$535,423** in Q1 2024, driven by reduced travel, integration of sales and marketing teams, and decreased digital advertising spend[186](index=186&type=chunk) [Other Expense, net](index=37&type=section&id=Other%20Expense%2C%20net) Explains the significant changes in other non-operating expenses - Other expense, net, significantly increased to **$3.92 million** in Q1 2024 from **$438,391** in Q1 2023[187](index=187&type=chunk) - This increase was primarily due to **$3.79 million** in interest expense recognized from the anti-dilution price protection embedded in the convertible note, which reduced its conversion price from **$1.25** to **$0.60**[187](index=187&type=chunk) [Net Loss](index=37&type=section&id=Net%20Loss) Discusses the factors contributing to the company's net loss - Net loss increased by **$1.72 million** (**37.3%**) to **$6.32 million** in Q1 2024, compared to **$4.60 million** in Q1 2023[188](index=188&type=chunk) - The increased loss was due to reduced sales and higher other expenses related to the convertible note, partially offset by lower operating expenses[188](index=188&type=chunk) [Cash Flows](index=37&type=section&id=Cash%20Flows) Analyzes the cash generated or used in operating, investing, and financing activities - Cash on hand increased slightly by **$3,897** (**0.5%**) to **$822,921** as of March 31, 2024, from **$819,024** as of December 31, 2023[189](index=189&type=chunk) - Net cash used in operating activities decreased by **$2.64 million** (**62.9%**) to **$1.55 million** in Q1 2024, driven by lower operating expenses, inventory purchases, and prepayments[190](index=190&type=chunk) - Net cash provided by financing activities decreased by **$1.31 million** (**44.4%**) to **$1.64 million** in Q1 2024, due to less common stock sales and warrant exercises in the prior year, partially offset by Series F Preferred stock sales[192](index=192&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's ability to meet its short-term and long-term financial obligations - As of March 31, 2024, the Company had a working capital deficit of **$1.97 million** and incurred an operating loss of **$2.39 million**[193](index=193&type=chunk) - There is substantial doubt about the Company's ability to continue as a going concern, requiring additional liquidity to meet financial obligations over the next twelve months[193](index=193&type=chunk) - Management is evaluating strategies to obtain additional funding and restructure operations to grow revenues and reduce expenses[193](index=193&type=chunk) [Off-Balance Sheet Arrangements](index=38&type=section&id=Off-Balance%20Sheet%20Arrangements) Discloses any material off-balance sheet financial commitments - As of March 31, 2024, the Company did not have any material off-balance sheet arrangements, other than standard operating leases[194](index=194&type=chunk) [Inflation](index=38&type=section&id=Inflation) Discusses the impact of inflationary pressures on the company's business operations - Inflation has negatively impacted the UAV systems industry and AgEagle's business globally, affecting access to components, parts, and labor for manufacturing[195](index=195&type=chunk) - The Company expects inflation and its effects to continue to have a significant negative impact on its business[195](index=195&type=chunk) [Climate Change](index=38&type=section&id=Climate%20Change) States management's assessment of climate change's impact on the company - Management believes that neither climate change nor related governmental regulations have had, or are expected to have, any material effect on the Company's operations[196](index=196&type=chunk) [New Accounting Pronouncements](index=38&type=section&id=New%20Accounting%20Pronouncements) Summarizes recently issued accounting standards and their expected impact - ASU 2023-09 (Income Taxes) and ASU 2023-07 (Segment Reporting) are effective for public business entities for annual periods beginning after December 15, 2024, and fiscal years beginning after December 15, 2023, respectively[197](index=197&type=chunk)[198](index=198&type=chunk) - The adoption of these ASUs is expected to have a financial statement disclosure impact only and is not expected to materially impact the Company's consolidated financial statements[197](index=197&type=chunk)[198](index=198&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=38&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) As a smaller reporting company, AgEagle Aerial Systems Inc. is not required to provide quantitative and qualitative disclosures about market risk - The Company is exempt from providing market risk disclosures as it qualifies as a "smaller reporting company"[199](index=199&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=38&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section details the evaluation of AgEagle's disclosure controls and procedures, noting their ineffectiveness as of March 31, 2024, due to a material weakness identified in accounting for a complex debt transaction [Evaluation of Disclosure and Control Procedures](index=38&type=section&id=Evaluation%20of%20Disclosure%20and%20Control%20Procedures) Assesses the effectiveness of the company's disclosure controls and procedures - The Company's CEO and CFO concluded that disclosure controls and procedures were not effective as of March 31, 2024[202](index=202&type=chunk) [Changes in Internal Control over Financial Reporting](index=39&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) Reports on any changes in internal control over financial reporting during the period - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, internal control over financial reporting during Q1 2024[203](index=203&type=chunk) [Material Weakness over a Complex Debt Transaction](index=39&type=section&id=Material%20Weakness%20over%20a%20Complex%20Debt%20Transaction) Identifies a material weakness in internal controls related to a complex debt transaction - A material weakness was identified in internal controls related to accounting for the modification of a complex convertible debt agreement[204](index=204&type=chunk) PART II – OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, and exhibits [ITEM 1. LEGAL PROCEEDINGS](index=39&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) AgEagle Aerial Systems Inc. reported no legal proceedings during the period - There were no legal proceedings to report[206](index=206&type=chunk) [ITEM 1A. RISK FACTORS](index=39&type=section&id=ITEM%201A.%20RISK%20FACTORS) As a smaller reporting company, AgEagle Aerial Systems Inc. is not required to provide specific risk factor disclosures under this item - The Company is exempt from providing risk factor information as it qualifies as a "smaller reporting company"[207](index=207&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=39&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) AgEagle Aerial Systems Inc. reported no unregistered sales of equity securities or use of proceeds during the period - There were no unregistered sales of equity securities or use of proceeds to report[208](index=208&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=39&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) AgEagle Aerial Systems Inc. reported no defaults upon senior securities during the period - There were no defaults upon senior securities to report[209](index=209&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=39&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) Mine safety disclosures are not applicable to AgEagle Aerial Systems Inc.'s operations - Mine safety disclosures are not applicable[210](index=210&type=chunk) [ITEM 5. OTHER INFORMATION](index=39&type=section&id=ITEM%205.%20OTHER%20INFORMATION) AgEagle Aerial Systems Inc. reported no other information required under this item - There was no other information to report[211](index=211&type=chunk) [ITEM 6. EXHIBITS](index=39&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including certifications and XBRL taxonomy extensions Exhibits List | Exhibit No. | Description | | :------------ | :---------------------------------------------------------------- | | 31.1 | Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer | | 31.2 | Rule 13(a)-14(a)/15(d)-14(a) Certification of principal financial officer | | 32.1 | Section 1350 Certification of principal executive officer | | 32.2 | Section 1350 Certification of principal financial officer and principal accounting officer | | 101.INS | XBRL INSTANCE DOCUMENT | | 101.SCH | XBRL TAXONOMY EXTENSION SCHEMA | | 101.CAL | XBRL TAXONOMY EXTENSION CALCULATION LINKBASE | | 101.DEF | XBRL TAXONOMY EXTENSION DEFINITION LINKBASE | | 101.LAB | XBRL TAXONOMY EXTENSION LABEL LINKBASE | | 101.PRE | XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE | SIGNATURES This section contains the official signatures of the company's executive officers - The report was signed by William Irby, Chief Executive Officer and Director, and Mark DiSiena, Chief Financial Officer, on May 15, 2024[215](index=215&type=chunk)[216](index=216&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR | Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | | --- | --- | --- | | Common Stock, par value $0.001 per share | UAVS | NYSE American LLC | Securities registered pursuant to Section 12(g) of the Act: None. ☐ TRANSITION REPORT PURSUANT TO SECTION ...