AgEagle Announces Third Quarter 2023 Results

WICHITA, Kan., Nov. 14, 2023 (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, today announces its financial results for the three and nine months ended September 30, 2023.

Third Quarter 2023 Financial Highlights

• Revenues totaled $3.48 million for the three months ended September 30, 2023, decreasing 37% from $5.49 million reported for the same three-month period in the prior year. Nine-month revenues totaled $10.81 million in 2023, which were down 26% from $14.62 million for the first nine months of 2022.
  • The decrease in revenues was largely due to lower sales of the Company’s eBee series of drones – a decline that was expected in conjunction with the commercial launch of AgEagle’s new eBee VISION in September 2023.
• Total operating expenses increased minimally to $7.20 million from $7.23 million for the three-month reporting periods ended September 30, 2023 and 2022. They were reduced by 28% to $19.24 million from $24.01 million for the comparable nine-month reporting periods.
• Loss from operations increased 14% to $5.99 million from $5.15 million for the three months ended September 30, 2023 and 2022, respectively; and were reduced 17% to $15.02 million from $18.02 million for the nine months ended September 30, 2023 and 2022, respectively.
• As of June 30, 2023, AgEagle’s cash position was $1.6 million, which compared to cash of $4.35 million as of December 31, 2022.
  

For more detailed information relating to the Company’s second quarter financial performance, please refer to the Interim Report on Form 10-Q filed yesterday afternoon with the U.S. Securities and Exchange Commission and accessible at www.sec.gov or on AgEagle’s website at www.ageagle.com.

Third Quarter 2023 Operational Highlights

• The Company announced that DeltaQuad, a global leader in the development, design and production of electrical, long range Vertical Take-Off and Landing (“VTOL”) drones, is the first to fully integrate AgEagle’s latest sensor innovation, the RedEdge-P dual, in its new DeltaQuad EVO.
• Commercial production of the Company’s next generation fixed-wing unmanned aerial system, the eBee VISION commenced and orders for the systems are now being accepted.
• Kelluu Ltd., a privately-owned Finnish company engaged in the design, manufacture and operation of autonomous airships for aerial environmental and critical infrastructure monitoring and surveillance announced it has chosen to equip its growing fleet of unmanned airships with AgEagle’s high performance RedEdge-P multispectral cameras for collection of high-quality images and sensor data.
• AgEagle completed an offering of 16,720,000 shares of common stock and 25,080,000 common stock purchase warrants (the "common warrant") to purchase 25,080,000 shares of common stock at a combined price of $0.25 per share and accompanying common warrants for aggregate gross proceeds of approximately $4.2 million, before deducting placement agent fees and other offering expenses. 

Barrett Mooney, AgEagle’s Chairman and CEO, stated, “We enter the fourth quarter of 2023 optimistic about the Company’s long-term growth potential following the commercial release of our new eBee VISION drone. Given the rise in geopolitical conflicts and correlating increase in drone usage, we believe that AgEagle is well-positioned to support the increasing demand while remaining committed to achieving cost and productivity efficiencies and executing ongoing product innovation and our global marketing strategies.”

About AgEagle Aerial Systems Inc.

Through its three centers of excellence, AgEagle is actively engaged in designing and delivering best-in-class flight hardware, sensors and software that solve important problems for its customers. Founded in 2010, AgEagle was originally formed to pioneer proprietary, professional-grade, fixed-winged drones and aerial imagery-based data collection and analytics solutions for the agriculture industry. Today, AgEagle is a leading provider of full stack drone solutions for customers worldwide in the energy, construction, agriculture, and government verticals. For additional information, please visit our website at www.ageagle.com.

Forward-Looking Statements

This press release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements involve risks and uncertainties that could negatively affect our business, operating results, financial condition, and stock price. Factors that could cause actual results to differ materially from management’s current expectations include those risks and uncertainties relating to our competitive position, the industry environment, potential growth opportunities, and the effects of regulation and events outside of our control, such as natural disasters, wars, or health epidemics. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations or any changes in events, conditions, or circumstances on which any such statement is based, except as required by law.

AgEagle Aerial Systems Contacts:

Investor Relations:
Email: [e-mail]
Media: 
Email: [e-mail]

SYSTEMS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

		As of
		September 30, 2023					December 31, 2022
		(unaudited)
ASSETS
CURRENT ASSETS:
Cash		$	1,600,143				$	4,349,837
Accounts receivable, net			2,015,045					2,213,040
Inventories, net			6,063,935					6,685,847
Prepaid and other current assets			832,188					1,029,548
Notes receivable			185,000					185,000
Total current assets			10,696,311					14,463,272
Property and equipment, net			597,964					791,155
Right of use assets			3,498,051					3,952,317
Intangible assets, net			9,242,659					11,507,653
Goodwill			21,679,411					23,179,411
Other assets			336,091					291,066
Total assets		$	46,050,487				$	54,184,874
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable		$	2,125,689				$	1,845,135
Accrued liabilities			1,650,609					1,680,706
Promissory note			2,625,000					287,381
Contract liabilities			329,536					496,390
Current portion of lease liabilities			840,535					628,113
Current portion of COVID loans			306,722					446,456
Total current liabilities			7,878,091					5,384,181
Long term portion of lease liabilities			2,756,056					3,161,703
Long term portion of COVID loans			509,184					446,813
Defined benefit plan obligation			—					106,163
Long term portion of promissory note			1,470,000					1,861,539
Total liabilities			12,613,331					10,960,399
COMMITMENTS AND CONTINGENCIES (SEE NOTE 10)
STOCKHOLDERS’ EQUITY:
Preferred Stock, $0.001 par value, 25,000,000 shares authorized:
Preferred Stock, Series F Convertible, $0.001 par value, 35,000 shares authorized, 6,275 shares issued and outstanding as of September 30, 2023, and 5,863 shares issued and outstanding as of December 31, 2022, respectively			6					6
Common Stock, $0.001 par value, 250,000,000 shares authorized, 117,878,831 and 88,466,613 shares issued and outstanding as of September 30, 2023, and December 31, 2022, respectively			117,880					88,467
Additional paid-in capital			167,523,676					154,679,363
Accumulated deficit			(134,374,548	)				(111,553,444	)
Accumulated other comprehensive income			170,142					10,083
Total stockholders’ equity			33,437,156					43,224,475
Total liabilities and stockholders’ equity		$	46,050,487				$	54,184,874

See accompanying notes to these condensed consolidated financial statements.

AGEAGLE AERIAL SYSTEMS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)

		For the Three Months Ended September 30,								For the Nine Months Ended September 30,
		2023				2022				2023				2022
Revenues		$	3,483,932			$	5,490,714			$	10,819,213			$	14,620,565
Cost of sales			2,269,858				3,407,573				6,594,973				8,622,436
Gross Profit			1,214,074				2,083,141				4,224,240				5,998,129
Operating Expenses:
General and administrative			3,357,550				4,175,090				10,435,834				14,093,655
Research and development			1,368,394				1,818,540				4,320,216				6,185,777
Sales and marketing			978,243				1,236,841				2,911,963				3,736,548
Impairment			1,500,000				—				1,579,287				—
Total Operating Expenses			7,204,187				7,230,471				19,247,300				24,015,980
Loss from Operations			(5,990,113	)			(5,147,330	)			(15,023,060	)			(18,017,851	)
Other Income (Expense):
Interest expense, net			(399,651	)			(6,727	)			(994,751	)			(29,776	)
Gain (loss) on debt extinguishment			(1,523,867	)			6,486,899				(1,523,867	)			6,486,899
Other income (expense), net			(106,497	)			332,110				(368,532	)			27,372
Total Other Income (Expense), net			(2,030,015	)			6,812,282				(2,887,150	)			6,484,495
Net Income (Loss) Before Income Taxes			(8,020,128	)			1,664,952				(17,910,210	)			(11,533,356	)
Provision for income taxes			—				—				—				—
Net Income (Loss)		$	(8,020,128	)		$	1,664,952			$	(17,910,210	)		$	(11,533,356	)
Net Income (Loss) Per Common Share – Basic		$	(0.07	)		$	0.02			$	(0.18	)		$	(0.14	)
Net Income (Loss) Per Common Share – Diluted		$	(0.07	)		$	0.01			$	(0.18	)		$	(0.14	)
Weighted Average Number of Shares Outstanding During the Period – Basic			111,083,155				85,966,687				98,976,085				81,004,011
Weighted Average Number of Shares Outstanding During the Period – Diluted			111,083,155				113,623,789				98,976,085				81,004,011
Comprehensive Income (Loss):
Net Income (Loss) attributable to common stockholders		$	(8,020,128	)		$	1,664,952			$	(17,910,210	)		$	(11,533,356	)
Amortization of unrecognized periodic pension costs			(742	)			97,846				43,302				100,487
Foreign currency cumulative translation adjustment			(7,027	)			(372,368	)			116,757				(220,060	)
Total comprehensive income (loss), net of tax			(8,027,897	)			1,390,430				(17,750,151	)			(11,652,929	)
Accrued dividends on Series F Preferred Stock			(49,122	)			(94,694	)			(170,277	)			(94,694	)
Deemed dividend on Series F Preferred Stock and warrants			—				—				(4,910,894	)			—
Total comprehensive income (loss) available to common stockholders		$	(8,077,019	)		$	1,295,736			$	(22,831,322	)		$	(11,747,623	)

See accompanying notes to these condensed consolidated financial statements. 

AGEAGLE AERIAL SYSTEMS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

		For the Nine Months Ended September 30,
		2023				2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(17,910,210	)		$	(11,533,356	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation			1,125,209				3,058,741
Depreciation and amortization			3,027,644				2,887,244
Defined benefit plan obligation and other			(188,653	)			(148,851	)
Amortization of debt discount and warrant modification			612,712				—
(Loss) gain on debt extinguishment			1,523,867				(6,486,899	)
Goodwill impairment			1,500,000				—
Lease impairment charge			79,287
Changes in assets and liabilities:
Accounts receivable, net			223,208				(396,617	)
Inventories, net			660,208				(2,221,569	)
Prepaid expenses and other assets			237,815				22,579
Accounts payable			264,123				(281,937	)
Accrued expenses and other liabilities			(28,133	)			(193,818	)
Contract liabilities			(169,352	)			(307,610	)
Other			212,606				433,357
Net cash used in operating activities			(8,829,669	)			(15,168,736	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment			(95,004	)			(250,379	)
Payment of acquisition-related liabilities			—				(6,610,900	)
Capitalization of platform development costs			(297,596	)			(635,568	)
Capitalization of internal use software costs			(171,516	)			(565,894	)
Net cash used in investing activities			(564,116	)			(8,062,741	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Sales of Common Stock, net of issuance costs			3,817,400				4,583,341
Sale of Preferred Stock, Series F Convertible, net of issuance costs			3,000,000				9,920,000
Exercise of stock options			—				74,350
Repayments on COVID loans			(87,052	)			(173,313	)
Net cash provided by financing activities			6,730,348				14,404,378
Effects of foreign exchange rates on cash flows			(86,257	)			(460,980	)
Net decrease in cash			(2,749,694	)			(9,288,079	)
Cash at beginning of period			4,349,837				14,590,566
Cash at end of period		$	1,600,143			$	5,302,487
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest cash paid		$	—			$	—
Income taxes paid		$	—			$	—
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Conversion of Preferred Stock, Series F Convertible to Common Stock		$	7,305			$	5,950
Issuance of Restricted Common Stock		$	388			$	316
Dividends on Series F Preferred Stock		$	170,277			$	94,694
Deemed dividend on Series F Preferred stock and warrant		$	4,910,894			$	—
Stock consideration for senseFly Acquisition		$	—			$	3,000,000
Settlement of Common Stock from contingent liability related to Measure		$	—			$	2,812,500

See accompanying notes to condensed consolidated financial statements.