Note 4 - Investment in Equity Securities

            On March 4, 2026, the Company executed a private placement subscription form (the "Subscription") with Aerodrome Group Ltd. ("ARDM"), a company whose ordinary shares are listed for trading on the Tel Aviv Stock Exchange Ltd. ("TASE").  Pursuant to the Subscription, the Company purchased 11,523,750 ordinary shares of ARDM for $3,000,000, or $0.26 per share. The Company's ownership in ARDM is approximately 12%. The Subscription includes a non-binding strategic framework, subject to the execution of mutually definitive agreements and applicable regulatory approvals, for the establishment of a joint venture ("JV") between AgEagle and ARDM for the distribution and marketing of advanced autonomous uncrewed systems, including loitering munitions, in the United States and Canadian markets, as long as AgEagle continues to hold ARDM ordinary shares. AgEagle has the sole and exclusive right to establish the JV for a period of eighteen months following the initial investment with ownership of the JV being split 51% and 49% between AgEagle and ARDM, respectively. As of June 30, 2026, the JV has not yet been established.  Due to our ownership being less than 20% and the JV not yet being established, we have accounted for our interest in ARDM in accordance with ASC 321 Investments in Equity Securities. We will continue to evaluate the appropriate accounting model to apply to this equity security investment at each reporting period date. The establishment of the JV could result in us having the ability to exert significant influence over ARDM, which would require our investment to be accounted for under ASC 323 as an equity method investment. As of June 30, 2026, our equity investment in ARDM is carried at fair value with changes in fair value being recognized as unrealized gain (losses), a component of other income (expenses) on the condensed consolidated statement of operations.  The activity in our investment in ARDM during the six months ended June 30, 2026 is presented below (see also Note 6).

On  April 13, 2026, the Company entered into a private placement agreement (the "ThirdEye Agreement") with ThirdEye Systems Ltd. ("ThirdEye Systems"), a company whose ordinary shares are listed for trading on the TASE under the ticker symbol THES. Pursuant to the ThirdEye Agreement, the Company agreed to invest an aggregate amount between $10.0 million and $14.95 million in exchange for 3,268,608 ordinary shares and 1,618,227 rights to shares of ThirdEye Systems. At closing, the Company contributed $10.0 million and received the 3,268,608 ordinary shares and 1,618,227 rights to shares of ThirdEye Systems for 9.27 ILS per share or $3.06 USD per share. The rights to purchase 1,618,227 shares of ThirdEye Systems for 9.27 ILS expired thirty days after closing in May 2026. Upon acquiring the investment in April 2026, our Chief Executive Officer became a board member of the investee and we executed a separate joint venture agreement with the investee.

Pursuant to the terms of the ThirdEye Agreement, EagleNXT and ThirdEye Systems also entered into a joint venture agreement (the “JV Agreement”) on  April 13, 2026 that provided for the formation of ThirdEye USA, LLC (“ThirdEye USA”) as a Delaware limited liability company.  EagleNXT will own 51.0% of ThirdEye USA and has the right to appoint three of the five managers who will oversee the daily affairs and operations of ThridEye USA. The investee has the right o appoint the remaining two managers. ThirdEye USA began operations in July 2026.  ThirdEye USA was formed for the purpose of commercialization counter drone, target recognition systems and related technologies within the United States and Canada.   Further, EagleNXT has committed to make a $4,000,000 capital contribution into ThirdEye USA for working capital purposes. As of the date of these condensed consolidated financial statements, these contributions have not yet been made to the investee.  Investee will provide ThirdEye USA with an exclusive royalty bearing license, for the use of the intellectual property to the extent included for use under the covered business, as defined in the JV Agreement, and support and oversee, coordinate and act in order to facilitate Israeli authorization and regulatory requirements applicable to the Company, if such is necessary.

Due to EagleNXT's ability to exercise significant influence over ThirdEye Systems due to board representation and the JV agreement, this investment would be accounted for under the equity method. However, at initial recognition, the Company irrevocably elected the fair value option under ASC 825-10 for this investment. Accordingly, the investment is measured at fair value, with changes in fair value recognized in earnings each period.

             The investments in marketable equity securities acquired during the six months ended June 30, 2026 are presented as follows on the accompanying condensed consolidated balance sheet as of June 30, 2026: