AgEagle Aerial Systems Inc. Announces Pricing of $6.5 Million Public Offering

Rhea-AI Summary

AgEagle Aerial Systems Inc. (NYSE American: UAVS) has announced the pricing of a $6.5 million public offering. The offering consists of 26,900,000 Units, each priced at $0.24 and including one share of common stock or one Pre-Funded Warrant, plus Series A and B warrants. The company plans to use the proceeds for repaying an outstanding note and general corporate purposes. Spartan Capital Securities, is acting as the sole placement agent. The offering is expected to close around October 1, 2024, subject to customary conditions. AgEagle, founded in 2010, is a provider of drone solutions for various industries including energy, construction, agriculture, and government sectors.

Positive

• Raising $6.5 million in capital through public offering
• Immediate exercisability of Pre-Funded Warrants
• Five-year expiration for Series A and B Warrants, providing long-term potential
• Funds to be used for debt repayment and working capital

Negative

• Potential dilution of existing shareholders due to new share issuance
• Offering price of $0.24 per Unit may be below current market price
• Additional warrants could lead to further dilution if exercised

Insights

Financial Analyst

AgEagle Aerial Systems' $6.5 million public offering is a significant move for a company with a market cap of only $4.2 million. This substantial capital raise, exceeding the company's current market value, suggests a pressing need for funds. The offering structure, combining common stock with warrants at a $0.24 price per unit, is notably below the current share price, indicating potential dilution for existing shareholders.

The use of proceeds for debt repayment and working capital hints at financial strain. While this cash injection provides a lifeline, it comes at a cost of significant shareholder dilution. The inclusion of Series A and B warrants with exercise prices of $0.24 and $0.50 respectively could lead to further dilution if exercised, but also provides potential upside if the stock price appreciates.

Investors should closely monitor how effectively management deploys this capital to drive growth and improve the company's financial position. The success of this offering in stabilizing AgEagle's finances and fueling its operations in the competitive drone industry will be important for its future prospects.

Tech Industry Analyst

AgEagle's public offering reflects the capital-intensive nature of the drone industry and the company's efforts to maintain its position in a rapidly evolving market. As a provider of "full stack flight hardware, sensors and software," AgEagle operates in a sector with high R&D and production costs, competing against well-funded rivals.

The $6.5 million raise, while dilutive, could be important for advancing AgEagle's technology and maintaining market relevance. The drone industry is seeing increased adoption across various sectors, including energy, construction and agriculture, which aligns with AgEagle's target markets. However, the company's need for additional funding suggests challenges in achieving profitability or self-sustaining growth.

Investors should assess AgEagle's technological differentiation and its ability to capture market share in key verticals. The success of this capital raise in fueling innovation and market expansion will be critical in determining AgEagle's long-term viability in the competitive drone technology landscape.

Wichita, Kan., Sept. 30, 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, today announced the pricing of a public offering with gross proceeds to the Company expected to be approximately $6.5 Million, before deducting placement agent fees and other estimated offering expenses payable by the Company.

The offering consists of 26,900,000 Units, each consisting of one (1) share of our common stock, $0.001 par value per share (the “Common Stock”) or one Pre-Funded Warrant to purchase one share of Common stock, one Series A warrant (“Series A Warrant”) to purchase one share of Common Stock and one Series B warrant (“Series B Warrant”) to purchase one share of Common Stock. The public offering price per Unit is $0.24 (or $0.239 for each Unit with a Pre-Funded Warrant, which is equal to the public offering price per Unit with a share of Common Stock to be sold in the offering minus an exercise price of $0.001 per Pre-Funded Warrant). The Pre-Funded Warrants will be immediately exercisable and may be exercised at any time until exercised in full. The initial exercise price of each Series A Warrant is $0.24 per share of Common Stock or pursuant to an alternative cashless exercise option. The Series A Warrants are exercisable immediately and expire five years from the closing date of this public offering. The initial exercise price of each Series B Warrant is $0.50 per share of common stock. The Series B Warrants are exercisable immediately and expire five years from the closing date of this public offering.

Aggregate gross proceeds to the Company are expected to be approximately $6.5 Million. The transaction is expected to close on or about October 1, 2024, subject to the satisfaction of customary closing conditions. The Company expects to use the proceeds from the offering for the repayment of an outstanding note and the remainder for general corporate and working capital purposes.

Spartan Capital Securities, LLC is acting as the sole placement agent for the offering. Duane Morris LLP. is acting as counsel to the Company. Manatt, Phelps & Phillips LLP is acting as counsel to Spartan Capital Securities, LLC.

The securities described above are being offered pursuant to a registration statement on Form S-1 (File No. 333-281897) previously filed with the U.S. Securities and Exchange Commission (“SEC”) on September 30, 2024, as amended, which became effective on September 30, 2024. The offering is being made only by means of a prospectus forming part of the effective registration statement. Copies of the preliminary prospectus and, when available, copies of the final prospectus, relating to the offering may be obtained on the SEC’s website located at http://www.sec.gov. Electronic copies of the final prospectus relating to the offering may be obtained, when available, from: Spartan Capital Securities, LLC, 45 Broadway, New York, NY 10006, at (212) 293-0123. Before investing in this offering, interested parties should read the prospectus in its entirety, which provides more information about the Company and such offering.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

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, each as amended. Forward-looking statements include all statements that do not relate solely to historical or current facts, including without limitation statements regarding the Company’s product development and business prospects, and can be identified by the use of words such as “may,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan,” “believe,” “potential,” “should,” “continue” or the negative versions of those words or other comparable words. Forward-looking statements are not guarantees of future actions or performance. These forward-looking statements are based on information currently available to the Company and its current plans or expectations and are subject to a number of risks and uncertainties that could significantly affect current plans. Should one or more of these risks or uncertainties materialize, or the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

AgEagle Aerial Systems Contacts

Investor Relations Email: UAVS@ageagle.com

Media Email: media@ageagle.com

FAQ

What is the size of AgEagle's (UAVS) public offering announced on September 30, 2024?

AgEagle Aerial Systems Inc. (UAVS) announced a public offering with expected gross proceeds of approximately $6.5 million.

How many Units are being offered in AgEagle's (UAVS) public offering?

The offering consists of 26,900,000 Units, each priced at $0.24 per Unit.

What does each Unit in AgEagle's (UAVS) public offering include?

Each Unit includes one share of common stock or one Pre-Funded Warrant, plus one Series A warrant and one Series B warrant to purchase common stock.

When is the expected closing date for AgEagle's (UAVS) public offering?

The public offering is expected to close on or about October 1, 2024, subject to customary closing conditions.

How does AgEagle (UAVS) plan to use the proceeds from the public offering?

AgEagle plans to use the proceeds for repayment of an outstanding note and the remainder for general corporate and working capital purposes.