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RESTATEMENT

9 Months Ended

Sep. 30, 2024

Note 12 – RESTATEMENT

The net loss attributable to common stockholders erroneously excluded accrued cumulative dividends on outstanding Series F preferred stock and deemed dividends resulting from the triggering of down round features embedded within outstanding equity-linked financial instruments. Pursuant to ASC 260 Earnings Per Share, income available to common stockholders shall be computed by deducting dividends accumulated for the period on cumulative preferred stock. Also, the value of the effect of a down round feature shall be recognized in an equity-classified freestanding financial instrument when the down round feature is triggered. That effect shall be treated as a dividend and as a reduction of income available to common stockholders in basic and diluted earnings per share.

Further, the accrued cumulative dividends and deemed dividends were included as a component of other comprehensive loss. However, pursuant to ASC 220 – Income Statement – Reporting Comprehensive Income items required to be reported as direct adjustments to additional paid-in capital and retained earnings are not considered to be components of other comprehensive income (loss).

On November 7, 2024, the audit committee of the Company’s board of directors concluded, after discussion with the Company’s management, that the previously issued consolidated financial statements as of and for the years ended December 31, 2023 and 2022 and the Form 10-Qs for the quarterly periods March 31, 2023, June 30, 2023 and September 30, 2023 should no longer be relied upon due to the errors discussed above and required restatement.

As a result of the restatement matter discussed in our Explanatory Note included in this Form 10-Q, the quarterly financial statements for the periods ended March 31, 2024 and June 30, 2024 are being effectively restated in this current Form 10-Q for the period ended September 30, 2024, as follows:

Impact of the Restatement – March, June, and September 2023 and March and June 2024

Schedule Of Restatement

Statement of Operations Data (Unaudited)	As Previously Reported			Adjustment			As Restated
	Three Months Ended March 31, 2024
Statement of Operations Data (Unaudited)	As Previously Reported			Adjustment			As Restated
Net loss attributable to common stockholders	$	(6,315,587	)	$	(5,310,939	)	$	(11,626,526	)
Net loss per common Share - basic	$	(0.77	)	$	(0.64	)	$	(1.41	)
Total comprehensive loss, net of tax	$	(11,790,179	)	$	5,310,939		$	(6,479,240	)

Statement of Operations Data (Unaudited)	As Previously Reported			Adjustment			As Restated
	Three Months Ended March 31, 2023
Statement of Operations Data (Unaudited)
Net loss attributable to common stockholders	$	(4,599,499	)	$	(322,897	)	$	(4,922,396	)
Net loss per common share - basic (i)	$	(1.03	)	$	(0.07	)	$	(1.10	)
Total comprehensive loss, net of tax	$	(4,827,792	)	$	322,897		$	(4,504,895	)

Statement of Operations Data (Unaudited)	As Previously Reported			Adjustment			As Restated
	Three Months Ended June 30, 2024
Statement of Operations Data (Unaudited)
Net loss attributable to common stockholders	$	(2,929,708	)	$	(57,499	)	$	(2,987,207	)
Net loss per common share - basic	$	(0.24	)	$	—		$	(0.24	)
Total comprehensive loss, net of tax	$	(2,976,049	)	$	57,499		$	(2,918,550	)

Statement of Operations Data (Unaudited)	As Previously Reported			Adjustment			As Restated
	Three Months Ended June 30, 2023
Statement of Operations Data (Unaudited)
Net loss attributable to common stockholders	$	(5,290,583	)	$	(4,709,152	)	$	(9,999,735	)
Net loss per common share - basic (i)	$	(1.10	)	$	(0.98	)	$	(2.08	)
Total comprehensive loss, net of tax	$	(9,926,511	)	$	4,709,152		$	(5,217,359	)

Statement of Operations Data (Unaudited)	As Previously Reported			Adjustment			As Restated
	Six Months Ended June 30, 2024
Statement of Operations Data (Unaudited)
Net loss attributable to common stockholders	$	(9,245,295	)	$	(5,368,438	)	$	(14,613,733	)
Net loss per common share - basic	$	(0.90	)	$	(0.52	)	$	(1.42	)
Total comprehensive loss, net of tax	$	(14,766,228	)	$	5,368,438		$	(9,397,790	)

Statement of Operations Data (Unaudited)	As Previously Reported			Adjustment			As Restated
	Six Months Ended June 30, 2023
Statement of Operations Data (Unaudited)
Net loss attributable to common stockholders	$	(9,890,082	)	$	(5,032,050	)	$	(14,922,132	)
Net loss per common share - basic (i)	$	(2.13	)	$	(1.08	)	$	(3.21	)
Total comprehensive loss, net of tax	$	(14,754,304	)	$	5,032,050		$	(9,722,254	)


	Three Months Ended September 30, 2023
Statement of Operations Data (Unaudited)
Net loss attributable to common stockholders	$	(8,020,128	)	$	(49,122	)	$	(8,069,250	)
Net loss per common share – basic (ii)	$	(70.00	)	$	(2.64	)	$	(72.64	)
Total comprehensive loss, net of tax	$	(8,077,019	)	$	49,122		$	(8,027,897	)


	Nine Months Ended September 30, 2023
Statement of Operations Data (Unaudited)
Net loss attributable to common stockholders	$	(17,910,210	)	$	(5,081,171	)	$	(22,991,381	)
Net loss per common share - basic (ii)	$	(180.00	)	$	(52.29	)	$	(232.29	)
Total comprehensive loss, net of tax	$	(22,831,322	)	$	5,081,171		$	(17,750,151	)

	(i)	Net loss per common share basic as been retrospectively adjusted for the effect of a 1 to 20 reverse stock split that became effective on February 9, 2024.
	(ii)	Adjusted for the effect of a 1 to 50 reverse stock split that became effective on October 14, 2024 (see Note 13) and adjusted for the effect of 1 to 20 reverse stock split that became effective on February 9, 2024.

AGEAGLE AERIAL SYSTEMS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

(UNAUDITED)