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Warrants

12 Months Ended

Dec. 31, 2024

Note 11 – Warrants

Warrants Issued

As disclosed in Note 9, the Series F Agreement with Alpha includes 100% warrant coverage. Therefore, anytime we receive an investor notice to purchase Series F Convertible Preferred Stock, we also issue Series F Warrants. The exercise price on all Series F Warrants outstanding on October 22, 2024, the date of the Share Combination Event, were reduced to $1.10.

Additionally, on March 6, 2024 and November 24, 2023, pursuant to an engagement letter entered with a sole placement agent, the Company issued 2,737 and 1,484 common stock warrants to the placement agent, in connection with the sale of Series F and Series F Warrants, respectively. The warrants have an initial exercise price of $75.50 and $124.70, respectively, per share are exercisable for five years from the date of issuance and do not include any anti-dilution protection provisions in connection with a subsequent equity issuance, or otherwise.

On June 5, 2023, the Company issued warrants to purchase 25,080 shares of common stock at an exercise price of $380.00 per share in connection with the June 2023 Purchase Agreement executed (see Note 9 for further disclosures). On March 6, 2024, the exercise price of these warrants was reduced to $30.00 to induce exercise by interested Investors. The exercise price reduction resulted in the exercise of 16,590 warrants and the receipt of gross proceeds of $497,701. On May 31, 2024, the Company agreed to reduce the exercise price on the warrants remaining outstanding issued in June 2023 to $30.00 (see incremental value for modification above).

The warrants exercise price and warrants shares issuable issued to the placement agent and on June 5, 2023 will be subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the Warrants, but has no anti-dilution protection provisions. The Warrants will be exercisable on a “cashless” basis only in the event there is no effective registration statement registering, or the prospectus contained therein is not available for the sale of the Warrant Shares.

All the Warrants contain a beneficial ownership limitation, such that none of such Warrants may be exercised, if, at the time of such exercise, the holder would become the beneficial owner of more than 4.99% or 9.99%, as determined by the holder, of the Company’s outstanding shares of Common Stock following the exercise of such Warrant (the “Beneficial Ownership Limitation”).

As disclosed in Notes 8 and 9 above, we issued Series A and B Warrants in the October 2024 Offering that were deemed to be derivative liabilities. As of December 31, 2024, the fair value of the Series A and B Warrants has been classified and presented within long-term liabilities.

AGEAGLE AERIAL SYSTEMS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 11 – Warrants- Continued

A summary of activity related to warrants, classified within stockholders’ equity (deficit) for the years presented is as follows:

	Shares			Weighted Average Exercise Price			Weighted Average Remaining Contractual Term
Outstanding as of December 31, 2022		21,129		$	1.10	*		—
Issued – March 2023		7,143			1.10	*		—
Issued – June 2023		25,080			30.00	**		—
Issued – November 2023		14,836			1.10	*		—
Issued – November 2023		1,484			124.70
Exercised		(5,000	)		—			—
Outstanding as of December 31, 2023		64,672		$	15.23			3.43
Exercised		(16,590	)		30.00	**		—
Issued – March 6, 2024		16,588			1.10	*		—
Issued – March 7, 2024		2,737			75.50			—
Issued – April 12, 2024		28,378			1.10	*		—
Issued – May 31, 2024		32,659			1.10	*		—
Issued – July 29, 2024		21,598			1.10	*		—
Issued – August 27, 2024		24,765			1.10	*
Issued – December 18, 2024		142,857			5.25
Outstanding as of December 31, 2024		317,664		$	4.96			2.60
Exercisable as of December 31, 2024		317,664		$	4.96			2.60

Reflects the exercise price after a modification executed on May 31, 2024.

Reflects the exercise price after the Down Round Trigger events (see Note 9).

A summary of activity related to the Series A and B warrants, classified as liabilities, for the year ended December 31, 2024 is as follows:

	Shares			Weighted Average Exercise Price			Weighted Average Remaining Contractual Term
Outstanding as of December 31, 2023		-		$	-			-
Issued - October 2024 Offering		1,076,000			1.94	*		-
Issued - Share Combination Event		9,161,077			1.94			-
Exercises Series A		(3,154,537	)		-	**		-
Exercises Series B		(2,454,228	)		1.94			-
Outstanding as of December 31, 2024		4,628,312		$	1.94			4.75

Reflects the reduction in exercise price triggered by the Share Combination Event.

The Series A Warrants were exercised under the Alternate Cashless exercise provision resulting in the issuance of 6,309,074 shares of common stock and no cash proceeds.

AGEAGLE AERIAL SYSTEMS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023