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Note 1 - Description of the Business and Basis of Presentation
6 Months Ended
Jun. 30, 2026
Notes to Financial Statements  
Basis of Accounting [Text Block]

Note 1 Description of the Business and Basis of Presentation

 

Description of Business AgEagle™ Aerial Systems Inc. (“AgEagle”, the “Company”, “we”, “our” or "EagleNXT”) through its wholly owned subsidiaries, is actively engaged in designing and delivering best-in-class drones and sensors 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, the Company is earning distinction as a globally respected market leader offering customer-centric, advanced autonomous uncrewed aerial systems (“UAS”) which drive revenue at the intersection of flight hardware, sensors and software for industries that include military/defense, public safety, surveying/mapping, agriculture and utilities/engineering, among others. AgEagle has also achieved numerous regulatory firsts, including earning governmental approvals for its commercial and tactical drones to fly Beyond Visual Line of Sight and/or Operations Over People in the United States, Canada, Brazil and the European Union and being awarded Blue UAS certification from the Defense Innovation Unit of the U.S. Department of War.

 

The Company is currently headquartered in Allen, Texas, where we house our sensor and drone manufacturing operations, along with the counter-drone system manufacturing of ThidrEye USA, a joint venture wit Israel's ThirdEye Systems, Inc. We operate drone distribution and coordinate global customer service operations out of Raleigh, North Carolina. In addition, the Company operates engineering and drone manufacturing operations in Lausanne, Switzerland in support of our international business activities.

 

On September 11, 2025 the Company rebranded to EagleNXT. The rebrand to EagleNXT underscores the Company’s commitment to advancing best-in-class drones, sensors, and software that serve both government and commercial markets. 

 

The Company’s mission statement, EagleNXT protects what matters most: lives, land, and the pursuit of peace, serves as the foundation of the rebrand and communicates EagleNXT’s focus on innovation, resilience, and long-term value creation.

 

Basis of Presentation – The condensed consolidated financial statements of the Company are presented in United States dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In the opinion of management, the Company has made all necessary adjustments, which include normal recurring adjustments, for a fair statement of the Company’s consolidated financial position and results of operations for the periods presented. Certain information and disclosures included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the U.S. Securities and Exchange Commission (“SEC”) rules. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2025, included in the Company’s Annual Report on Form 10-K, as filed with the SEC on March 31, 2026. The results for the three and six months ended June 30, 2026 and 2025 are not necessarily indicative of the results to be expected for a full year, any other interim periods or any future year or periods.

 

The condensed consolidated financial statements include the accounts of AgEagle and its wholly-owned subsidiaries, AgEagle Aerial, Inc., Measure Global, Inc, (currently inactive with no operations), senseFly S.A. and senseFly Inc. All significant intercompany balances and transactions have been eliminated in consolidation.

 

 

Liquidity and Going Concern – In pursuit of the Company’s long-term growth strategy and acquisitions, the Company has sustained continued operating losses. During the six months ended June 30, 2026, the Company had a net loss of $13,966,367 due to unrealized losses incurred on short-term and long-term investments in marketable securities of $3,359,546 and used cash in operating activities of $8,372,751. As of June 30, 2026, the Company has a working capital of $23,720,063, an accumulated deficit of $246,589,767, and a cash balance of approximately $15,910,000.  Recently, the Company has been generating capital from the sale of its Series F 5% Convertible Stock ("Series F") and Series G Convertible Preferred Stock ("Series G") (see Note 7).  During the six months ended June 30, 2026, the Company generated $8,250,000 in net proceeds from the issuance of Series F and Series G. As of June 30, 2026, 80,750 and 0 shares of Series G and Series F, respectively, with a stated value of $1,000 per share remain available for issuance.  While the Company has historically been successful in raising capital to meet its working capital needs, the ability to continue raising such capital is not guaranteed. There is substantial doubt about the Company’s ability to continue as a going concern, as the Company will require additional liquidity to continue its operations and meet its financial obligations for 12 months from the date these condensed consolidated financial statements are issued. The Company is evaluating strategies to obtain the additional funding required to support future operations, as well as restructuring initiatives to increase revenue and reduce expenses.

 

If the Company is unable to generate significant sales growth in the near term and raise additional capital, there is a risk that the Company could default on additional obligations; and could be required to discontinue or significantly reduce the scope of its operations if no other means of financing operations are available. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amount and classification of liabilities or any other adjustment that might be necessary should the Company be unable to continue as a going concern.