Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 14, 2020 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | AgEagle Aerial Systems Inc. | |
Entity Central Index Key | 0000008504 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Entity File Number | 001-36492 | |
Entity Incorporation, State Country Code | NV | |
Entity Common Stock, Shares Outstanding | 33,305,742 |
CONDENSED INTERIM CONSOLIDATED
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash | $ 356,084 | $ 717,997 |
Accounts receivable | 50,038 | 65,833 |
Inventories, net | 116,053 | 221,167 |
Prepaid and other current assets | 107,013 | 124,163 |
Total current assets | 629,188 | 1,129,160 |
Property and equipment, net | 36,121 | 37,776 |
Intangible assets, net | 482,337 | 520,573 |
Goodwill | 3,108,000 | 3,108,000 |
Total assets | 4,255,646 | 4,795,509 |
CURRENT LIABILITIES: | ||
Accounts payable | 85,154 | 57,432 |
Accrued expenses | 34,086 | 36,416 |
Accrued dividends | 204,000 | 163,555 |
Contract liabilities | 40,978 | 264,472 |
Payroll liabilities | 6,877 | 0 |
Total current liabilities | 371,095 | 521,875 |
Total liabilities | 371,095 | 521,875 |
COMMITMENTS AND CONTINGENCIES | 0 | 0 |
STOCKHOLDERS' EQUITY: | ||
Common stock, $0.001 par value, 250,000,000 shares authorized, 15,610,019 and 15,424,394 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively | 15,610 | 15,424 |
Additional paid-in capital | 12,470,994 | 12,456,989 |
Accumulated deficit | (8,602,058) | (8,198,785) |
Total stockholders' equity | 3,884,551 | 4,273,634 |
Total liabilities and stockholders' equity | 4,255,646 | 4,795,509 |
Series C Convertible Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock, Value | 3 | 4 |
Series D Convertible Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock, Value | $ 2 | $ 2 |
CONDENSED INTERIM CONSOLIDATE_2
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 15,610,019 | 15,424,394 |
Common stock, shares outstanding | 15,610,019 | 15,424,394 |
Series C Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, shares issued | 3,312 | 3,501 |
Preferred Stock, shares outstanding | 3,312 | 3,501 |
Series D Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,000 | 2,000 |
Preferred stock, shares issued | 2,000 | 2,000 |
Preferred Stock, shares outstanding | 2,000 | 2,000 |
CONDENSED INTERIM CONSOLIDATE_3
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Revenues | $ 391,280 | $ 45,993 |
Cost of sales | 174,483 | 33,948 |
Gross Profit | 216,797 | 12,045 |
Operating Expenses: | ||
Selling expenses | 3,041 | 12,127 |
General and administrative | 445,531 | 474,902 |
Professional fees | 171,498 | 90,019 |
Total operating expenses | 620,070 | 577,048 |
Loss from operations | (403,273) | (565,003) |
Other Expenses: | ||
Interest expense | 0 | (462) |
Total Other Expenses | 0 | (462) |
Loss Before Income Taxes | (403,273) | (565,465) |
Provision for income taxes | 0 | 0 |
Net Loss | $ (403,273) | $ (565,465) |
Net Loss Per Share - Basic and Diluted | $ 0 | $ 0 |
Weighted Average Number of Shares Outstanding During the Period - Basic and Diluted | 15,599,109 | 13,254,949 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) | Preferred Stock Series B | Preferred Stock Series C | Preferred Stock Series D | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance, beginning at Dec. 31, 2018 | $ 5 | $ 2 | $ 12,549 | $ 12,171,274 | $ (5,676,091) | $ 6,507,739 | |
Balance, beginning (shares) at Dec. 31, 2018 | 4,662 | 2,000 | 12,549,394 | ||||
Conversion of Series C | $ (1) | $ 1,900 | (1,899) | ||||
Conversion of Series C (shares) | (1,026) | 1,900,000 | |||||
Dividend on Series D Preferred Stock | (40,000) | (40,000) | |||||
Share compensation period costs | 60,920 | 60,920 | |||||
Net loss | (565,465) | (565,465) | |||||
Balance, ending at Mar. 31, 2019 | $ 4 | $ 2 | $ 14,449 | 12,190,295 | (6,241,556) | 5,963,194 | |
Balance, ending (shares) at Mar. 31, 2019 | 3,636 | 2,000 | 14,449,394 | ||||
Balance, beginning at Dec. 31, 2019 | $ 4 | $ 2 | $ 15,424 | 12,456,989 | (8,198,785) | 4,273,634 | |
Balance, beginning (shares) at Dec. 31, 2019 | 3,501 | 2,000 | 15,424,394 | ||||
Conversion of Series C | $ (1) | $ 350 | (349) | ||||
Conversion of Series C (shares) | (189) | 350,000 | |||||
Purchase of Acquisition | $ (164) | 164 | |||||
Purchase of Acquisition (shares) | (164,375) | ||||||
Dividend on Series D Preferred Stock | (40,445) | (40,445) | |||||
Share compensation period costs | 54,635 | 54,635 | |||||
Net loss | (403,273) | (403,273) | |||||
Balance, ending at Mar. 31, 2020 | $ 3 | $ 2 | $ 15,610 | $ 12,470,994 | $ (8,602,058) | $ 3,884,551 | |
Balance, ending (shares) at Mar. 31, 2020 | 3,312 | 2,000 | 15,610,019 |
CONDENSED INTERIM CONSOLIDATE_4
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (403,273) | $ (565,465) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 42,175 | 45,068 |
Loss on impairment | 54,635 | 60,920 |
Changes in assets and liabilities: | ||
Accounts receivable | 15,795 | (11,400) |
Inventories | 105,114 | 15,345 |
Prepaid expenses and other assets | 417,150 | 13,498 |
Contract liability | (223,494) | (2,368) |
Accounts payable | 27,722 | 30,131 |
Accrued liabilities | (2,330) | (20,016) |
Payroll liabilities | 6,877 | 15,651 |
Net cash used in operating activities | (359,629) | (418,636) |
CASH FLOW FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (2,284) | 0 |
Net cash used in investing activities | (2,284) | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on promissory note | 0 | (31,970) |
Net cash used in financing activities | 0 | (31,970) |
Net decrease in cash | (361,913) | (450,606) |
Cash at beginning of period | 717,997 | 2,601,730 |
Cash at end of period | 356,084 | 2,151,124 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Interest cash paid | 0 | 462 |
Income taxes paid | 0 | 0 |
NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
Conversion of Series B and C preferred stock into common stock | 189 | 1,026 |
Accrued dividends on Series D Preferred Stock | $ 40,445 | $ 40,000 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Description of Business | Note 1 – Description of Business AgEagle Aerial Systems Inc. (“AgEagle” or “the Company”) designs, produces and supports technologically-advanced small, unmanned aerial vehicles (“UAVs” or “drones”). In addition, to providing new utility to UAVs, the Company pioneers and innovates advanced aerial imaging data collection and analytics technologies capable of addressing the impending food and environmental sustainability crises that threaten our planet. Historically, the Company’s daily efforts have focused on delivering the tools and strategies necessary to define and implement commercial drone construction and delivery, along with sustainability and precision farming solutions that solve important problems confronting the global agricultural industry. In fact, AgEagle through its recent acquisition, has spent eight years serving customers, covering more than two million acres in 50 countries and monitoring 53 different crops. AgEagle remains intent on earning distinction as a trusted partner to clients seeking to adopt and support productive agricultural approaches to better farming practices which limit the impact on our natural resources, reduce reliance on inputs and materially increase crop yields and profits. In early 2019, AgEagle further expanded its marketing efforts to provide for the introduction of ParkView In the first half of 2019, the Company introduced HempOverview The Company also designs, produces, distributes and supports technologically advanced small UAVs or drones that AgEagle offers for commercial sale to the precision agriculture industry. In addition to UAV sales, in late 2018, the Company introduced a new drone-leasing program, alleviating farmers and agribusinesses from significant upfront costs associated with purchasing a drone, while also relieving them from ongoing drone maintenance and support requirements. Additionally, the new program provides the option of engaging a trained AgEagle pilot to operate the drone and manage the entire image collection process, creating a truly turnkey aerial imagery capture solution for its customers. In the third quarter of 2019, AgEagle announced that it had begun to actively pursue expansion opportunities within the emerging Drone Logistics and Transportation market and revealed that it had received its first purchase orders from a major ecommerce company to manufacture and assemble UAVs designed to meet the critical specifications for drones that are meant to carry packaged goods in urban and suburban areas. Central to the Company’s long-term growth strategy, AgEagle will continue to identify opportunities to leverage its proprietary technological platform and industry expertise to penetrate new, high growth market sectors that may benefit from the Company’s advanced aerial imagery-based data collection and analytics solutions. Corporate History; Recent Business Combination On March 26, 2018, our predecessor company, EnerJex Resources, Inc. (“EnerJex”), a Nevada company, consummated the transactions contemplated by the Agreement and Plan of Merger (the “Merger Agreement”), dated October 19, 2017, pursuant to which AgEagle Merger Sub, Inc., a Nevada corporation and a wholly-owned subsidiary of EnerJex, merged with and into AgEagle Aerial Systems Inc., a privately held company organized under the laws of the state of Nevada (“AgEagle Sub”), with AgEagle Sub surviving as a wholly-owned subsidiary of EnerJex (the “Merger”). In connection with the Merger, EnerJex changed its name to AgEagle Aerial Systems Inc. (the “Company, “we,” “our,” or “us”) and AgEagle Sub changed its name initially to “Eagle Aerial, Inc. and then to” AgEagle Aerial, Inc. On August 28, 2018, we closed the transaction contemplated by the Asset Purchase Agreement (the “Purchase Agreement”) dated July 25, 2018 with AgEagle Aerial, Inc., a wholly-owned subsidiary of the Company; Agribotix, LLC, a Colorado limited liability company (“Agribotix” or the “Seller”); and the other parties named therein. Pursuant to the Purchase Agreement, we acquired all right, title and interest in and to all assets owned by Agribotix, which included Agribotix’s primary product, FarmLens™, utilized in their business for providing integrated agricultural drone solutions and drone-enabled software technologies and services for precision agriculture. The Company believes that purchasing FarmLens benefitted us and our shareholders by developing important vertically integrated products and services. FarmLens FarmLens To date, FarmLens, The Company is currently headquartered in Neodesha, Kansas, but plans to relocate its headquarters and manufacturing operations to Wichita, Kansas during the second quarter of this year. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies The accompanying interim unaudited condensed consolidated financial statements have been prepared under the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information, which included condensed consolidated financial statements of the Company and its wholly owned subsidiaries as of March 31, 2020. Accordingly, the condensed consolidated financial statements do not include all the information and notes necessary for a comprehensive presentation of the financial position and results of operations and should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2019 and included in the Form 10-K filed with the SEC on April 13, 2020. It is management’s opinion that all material adjustments (consisting of normal recurring adjustments) have been made, which are necessary for a fair financial statement presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year ending December 31, 2020. Basis of Presentation and Consolidation The interim condensed consolidated financial statements include the accounts of AgEagle Aerial Systems Inc. and its wholly-owned subsidiaries AgEagle Aerial, Inc., EnerJex Kansas, Inc., Black Sable Energy, LLC, and Black Raven Energy, Inc., was dissolved effective November 2019. All significant intercompany balances and transactions have been eliminated in consolidation. The summary of significant accounting policies presented below is designed to assist in understanding the Company’s interim condensed consolidated financial statements. Such interim condensed consolidated financial statements and accompanying notes are the representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“US GAAP”) in all material respects and have been consistently applied in preparing the accompanying interim condensed consolidated financial statements. Use of Estimates – Fair Value of Financial Instruments – Cash and Cash Equivalents – Receivables and Credit Polic – The Company estimates an allowance for doubtful accounts based upon an evaluation of the current status of receivables, historical experience, and other factors as necessary. It is reasonably possible that the Company’s estimate of the allowance for doubtful accounts will change. The Company determined that no allowance was necessary as of March 31, 2020 and December 31, 2019. Inventorie – Goodwill and Intangible Assets – Intangible assets from acquired businesses are recognized at fair value on the acquisition date and consist of customer programs, trademarks, customer relationships, technology and other intangible assets. Customer programs include values assigned to major programs of acquired businesses and represent the aggregate value associated with the customer relationships, contracts, technology and trademarks underlying the associated program and are amortized on a straight-line basis over a period of expected cash flows used to measure fair value, which ranges from four to five years. Revenue Recognition and Concentration – Revenue from Contracts with Customers Under fixed-price contracts, the Company agrees to perform the specified work for a pre-determined price. To the extent the Company’s actual costs vary from the estimates upon which the price was negotiated, it will generate more or less profit or could incur a loss. The Company accounts for a contract after it has been approved by all parties to the arrangement, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The Company generally recognizes revenue on sales to customers, dealers and distributors upon satisfaction of performance obligations which generally occurs once controls transfer to customers, which is when product is shipped or delivered depending on specific shipping terms. Subscription services for use of the Company’s proprietary FarmLens HempOverview Sales concentration information for customers comprising more than 10% of the Company’s total net sales such customers is summarized below: Percent of total sales for three months Customers 2020 2019 Customer A 95.6 % 68.0 % Customer B — 29.1 % Accounts receivables due from Customer A and C comprised all of the accounts receivable as of March 31, 2019. The table below reflects our revenue for the periods indicated by product mix. For the three months ended March 31, Type 2020 2019 Drone Assembly and Product Sales $ 374,278 $ 38,083 Software Platform Sales 17,002 7,910 Total $ 391,280 $ 45,993 Vendor Concentration – FarmLens Shipping Costs – Earnings Per Share Potentially Dilutive Securities Income Taxes - Stock-Based Compensation Awards – “Compensation – Stock Compensation”, The Black-Scholes option-pricing model requires the input of certain assumptions that require the Company’s judgment, including the expected term and the expected stock price volatility of the underlying stock. The assumptions used in calculating the fair value of stock-based compensation represent management’s best estimates, but these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change resulting in the use of different assumptions, stock-based compensation expense could be materially different in the future. Recently Issued Accounting Pronouncements Adopted In January 2016, the FASB issued ASU 2016-01, Financial Instruments: Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, FASB issued Account Standards Update 2016-02 – Leases In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other In August 2018, the FASB issued ASU 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement Pending Adoption Other recent accounting pronouncements issued by FASB did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 3 — Inventories Inventories consist of the following at: March 31, December 31, Raw materials $ 75,432 $ 193,022 Work-in-process 40,113 26,456 Finished goods 10,508 11,689 Gross inventory $ 126,053 $ 231,167 Less obsolete reserve (10,000 ) (10,000 ) Total $ 116,053 $ 221,167 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 4 — Property and Equipment Property and equipment consist of the following at: March 31, December 31, Property and equipment $ 143,042 $ 140,758 Less accumulated depreciation (106,921 ) (102,982 ) $ 36,121 $ 37,776 Depreciation expense for the three months ended March 31, 2020 and 2019 was $3,939 and $3,232, respectively. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 5 – Intangible Assets Intangible assets are recorded at cost and consist of assets acquired in 2018 as a result of a business acquisition in 2018. Amortization is computed using the straight-line method over the estimate useful life of the asset. Intangible assets were comprised of the following at March 31, 2020: Intangible Assets Estimated Life Gross Cost Accumulated Amortization Net Book Value Intellectual Property/Technology 5 yrs. $ 433,400 $ (137,243 ) $ 296,157 Customer Base 5 yrs. 72,000 (22,800 ) 49,200 Tradenames - Trademarks 5 yrs. 58,200 (18,430 ) 39,770 Non-compete agreement 4 yrs. 160,900 (63,690 ) 97,210 Carrying value as of March 31, 2020 $ 724,500 $ (242,163 ) $ 482,337 The weighted average remaining amortization period in years is 3.5 years. Amortization expense for the three months ended March 31, 2020 and 2019 was $38,236 and $41,836, respectively. Future amortization is as follows for fiscal years ending: 2020 (months remaining) 2021 2022 2023 Intellectual Property/Technology $ 65,010 $ 86,680 $ 86,680 $ 57,786 Customer Base 10,800 14,400 14,400 9,600 Tradenames and Trademarks 8,730 11,640 11,640 7,760 Non-compete Agreement 30,169 40,225 26,817 — Total $ 114,709 $ 152,945 $ 139,537 $ 75,146 |
Promissory Note
Promissory Note | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Promissory Note | Note 6 – Promissory Note As part of the liabilities assumed from the Merger, the Company recorded a promissory note for a principal amount of $125,556 and accrued interest of $4,171 payable over twelve months and maturing on March 27, 2019. The total amount outstanding as March 31, 2019 was $9,028, resulting in principal payments of $31,970 made in the first three months of 2019. The Company recorded interest of $462 for the three months ended March 31, 2019. The note was paid in full in April 2019. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Equity | Note 7 – Stockholders’ Equity Capital Stock Issuances as of the date of Merger As a result of the Merger all the holders of the Company’s 10% Series A Cumulative Redeemable Perpetual Preferred Stock (the “Series A Preferred Stock”) had their shares automatically converted into 902,186 shares of the Company’s common stock. The Company’s Series B Convertible Preferred Stock of 8.25 shares (the “Series B Preferred Stock”) remained outstanding and were convertible into 5,388 shares of the Company’s common stock. The Company’s Series C Convertible Preferred Stock (the “Series C Preferred Stock”) included 2,879 of remaining shares after the conversion and retirement of all the Company’s promissory notes due. These shares are convertible into 1,471,425 shares of the Company’s common stock. Furthermore, an additional 4,000 shares of Series C Preferred Stock were issued and are convertible into 3,020,797 shares of the Company’s common stock, as they were issued to the current holder of Series C Preferred Stock in connection with a $4 million financing of Series C Preferred Stock (the “Financing”). On May 11, 2018, we issued an additional 250 shares of our Series C Preferred Stock, convertible into 163,265 shares of our common stock and received a cash payment of $250,000 for the issuance of the Series C Preferred Stock. The Series C Preferred Stock includes a beneficial ownership limitation preventing conversion of shares of Series C Preferred Stock into more than 9.99% of the number of shares of our common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the Series C Preferred Stock. On November 21, 2017, Alpha Capital Anstalt (“Alpha”) signed a binding commitment letter EnerJex to provide prior to or at the closing of the Merger a minimum of $4 million in new equity capital (the “Private Placement”). The Private Placement was consummated on March 26, 2018. In connection with the Private Placement, Alpha purchased an additional 4,000 shares of Series C Preferred Stock at a purchase price of $1,000 per share for total aggregate consideration of $4 million. At the time of private placement, the Series C Preferred Stock was convertible into 2,612,245 shares of our common stock. In addition, as consideration for their funding commitment, Alpha received a fee equal to 408,552 shares of our common stock. Each share of Series C Preferred Stock is convertible into a number of shares of our common Stock equal to the quotient determined by dividing (x) the stated value of $1,000 per share, by (y) a conversion price of $1.53. Until the volume weighted average price of our common stock on NYSE exceeds $107.50 with average trading volume of 200,000 shares per day for ten consecutive trading days, the conversion price of our Series C Preferred Stock is subject to full-ratchet, anti-dilution price protection. Under that provision, if, while that full-ratchet, anti-dilution price protection is in effect, we issue shares of our common stock at a price per share (the “Dilutive Price”) that is less than the conversion price, then the conversion price of our Series C Preferred Stock is automatically reduced to be equal to the Dilutive Price. The effect of that reduction is that, upon the issuance of shares of common stock at a Dilutive Price, the Series C Preferred Stock would be convertible into a greater number of shares of our common stock. Series C Preferred Stock During the three-month period ended March 31, 2020, Alpha Capital Anstalt converted 189 shares of Series C Preferred Stock into 350,000 shares of common stock at a conversion price of $0.54. During the three-month period ended March 31, 2019, Alpha Capital Anstalt converted a total of 1,026 shares of Series C Preferred Stock into 1,900,000 shares of common stock at a conversion price of $0.54. Series D Preferred Stock On December 27, 2018, AgEagle Aerial Systems Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Agreement”) with Alpha Capital Anstalt (the “Purchaser”). Pursuant to the terms of the Agreement, the Board of Directors of the Company (the “Board”) designated a new series of preferred stock, the Series D Preferred Stock, which is non-convertible and provides for an 8% annual dividend and is subject to optional redemption by the Company (the “Preferred Stock”). The Company issued 2,000 shares of Preferred Stock and a warrant to purchase 3,703,703 shares of common stock, par value $0.001 per share (the “Warrant,” and the shares of common stock underling the warrants, the “Warrant Shares”) for $2,000,000 in gross proceeds. The Company also entered into a Registration Rights Agreement, granting registration rights to the Purchaser with respect to the Warrant Shares. The Agreement provides that upon a subsequent financing or financings with net proceeds of at least $500,000, the Company must exercise its optional redemption of the Preferred Stock (as more fully described below in Item 5.03) and apply any and all net proceeds from such financing(s) to the redemption in full of the Preferred Stock. The Preferred Stock is non-convertible, provides for an 8% annual dividend payable semi-annually and has liquidation rights senior to the common stock, but pari passu with the Company’s Series C Preferred Stock. During the three months ended March 31, 2020 and 2019, the Company recorded $40,444 and $40,000 of accrued dividends, respectively. As of March 31, 2020 and December, 31, 2019, accumulated accrued dividends totaled $204,000 and $163,555, respectively, as presented on the condensed interim consolidated balance sheets. The Preferred Stock has no voting rights, except that the Company shall not undertake certain corporate actions as set forth in the Certificate of Designation that would materially impact the holders of Preferred Stock without their consent. The Preferred Stock is subject to optional redemption by the Company at 115% of the stated value of the Preferred Stock outstanding at the time of such redemption, plus any accrued but unpaid dividends and all liquidated damages or other amounts due. Any such optional redemption may only be exercised after giving notice and upon satisfaction of certain equity conditions set forth in the Certificate of Designation, including (i) all dividends, liquidated damages and other amounts have been paid; (ii) there is an effective registration statement covering the Warrant Shares, or the Warrant Shares can be exercised through a cashless exercise without restriction under Rule 144, (iii) the Warrant Shares are listed on an exchange, (iv) the holder is not in possession of material, non-public information, (v) there is a sufficient number of authorized shares for issuance of all Warrant Shares, and (vi) for each trading day in a period of 20 consecutive trading days prior to the redemption date, the daily trading volume for the common stock on the principal trading market exceeds $200,000 per trading day. O ptions Issued On March 26, 2018, the EnerJex 2017 Omnibus Equity Incentive Plan (the “Plan”) became effective. Under the Plan, the Company can grant equity-based and other incentive awards to officers, employees and directors of, and consultants and advisers to, the Company. The purpose of the Plan is to help the Company attract, motivate and retain such persons and thereby enhance shareholder value. The Plan shall continue in effect, unless sooner terminated, until the tenth (10th) anniversary of the date on which it is adopted by the Board of Directors (except as to awards outstanding on that date). The Board of Directors in its discretion may terminate the Plan at any time with respect to any shares for which awards have not theretofore been granted; provided, however, that the Plan’s termination shall not materially and adversely impair the rights of a holder, without the consent of the holder, with respect to any award previously granted. There are 3,000,000 shares of common stock reserved for the Plan. On March 31, 2020, the Company issued options to purchase 87,000 shares of common stock to directors and employees of the Company at the fair value exercise price of $0.41 per share expiring on March 30, 2025. The Company determined the fair-market value of the options to be $21,492. In connection with the issuance of these options, the Company recognized no stock compensation expense for the three months ended March 31, 2020. During the periods March 31, 2020 and 2019, the company recognized stock compensation expense of $54,635 and $60,920, respectively on options previously issued under the Plan that vested. The fair value of options granted during the three-month periods ending March 31, 2020 and 2019 were determined using the Black-Scholes option valuation model. The expected term of options granted is based on the simplified method in accordance with Securities and Exchange Commission Staff Accounting Bulletin 107 and represents the period of time that options granted are expected to be outstanding. The Company makes assumptions with respect to expected stock price volatility based on the average historical volatility of peers with similar attributes. In addition, the Company determines the risk-free rate by selecting the U.S. Treasury with maturities similar to the expected terms of grants, quoted on an investment basis in effect at the time of grant for that business day. The significant weighted average assumptions relating to the valuation of the Company’s stock options granted during the three months ended March 31, 2020 were as follows: March 31, 2020 Dividend yield 0.00 % Expected life 3.5 Years Expected volatility 90.07 % Risk-free interest rate 0.29 % A summary of the options activity for the three months ended March 31, 2020 is as follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at January 1, 2020 2,480,470 $ 0.39 6.28 $ 378,111 Granted 87,000 0.41 5 — Outstanding at March 31, 2020 2,567,470 0.39 6 $ 381,158 Exercisable at period end 1,668,517 $ 0.38 5.64 $ 342,608 For options granted during the three months ended March 31, 2020, the fair value of the Company’s stock was based upon the close of market price on the date of grant. As of March 31, 2020, the future expected stock-based compensation expense e to be recognized in future years is $226,051, through March 31, 2022. Intrinsic value is measured using the fair market value at the date of exercise (for shares exercised) or at March 31, 2020 (for outstanding options), less the applicable exercise price. A summary of the options activity for the three months ended March 31, 2019 is as follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at January 1, 2019 1,494,158 $ 0.46 6.93 $ 409,678 Granted 540,000 0.42 8.68 — Exercised/Forfeited (70,438 ) 0.49 — — Outstanding at March 31, 2019 1,963,720 0.45 7.19 256,049 Exercisable at period end 1,101,835 $ 0.26 6.75 $ 256,049 |
Warrants to Purchase Common Sto
Warrants to Purchase Common Stock | 3 Months Ended |
Mar. 31, 2020 | |
Notes to Financial Statements | |
Warrants to Purchase Common Stock | Note 8 – Warrants to Purchase Common Stock All warrants outstanding as of March 31, 2020 are scheduled to expire between December 26, 2023 and October 21, 2024. A summary of activity related to warrants for the three months ended March 31, 2020 follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Outstanding at January 1, 2020 4,531,924 $ 0.72 4.05 Outstanding at March 31, 2020 4,531,924 0.72 3.80 Exercisable at March 31, 2020 4,531,924 0.72 3.80 A summary of activity related to warrants for the three months ended March 31, 2019 follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Outstanding at January 1, 2019 4,531,924 $ 0.72 5.05 Outstanding at March 31, 2019 4,531,924 0.72 5.05 Exercisable at March 31, 2019 4,531,924 0.72 5.05 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 9 – Commitments and Contingencies Operating Leases The Company leases office space located at 117 South 4 th As a result of the Agribotix acquisition, the Company assumed a lease for offices in Boulder, Colorado for $2,000 a month. The lease ended on May 31, 2019 and the Company renewed the lease for another year with an option to terminate at any time with a 30-day prior notice period. Total rent expense was $7,500 and $13,600 for the three months ended March 31, 2020 and 2019, respectively, which is included in general and administrative expenses on the statements of operations. GreenBlock Capital LLC Consulting Agreement On May 3, 2019, the Company entered into a consulting agreement with GreenBlock Capital LLC (“Consultant”) to serve as strategic advisor and consultant to the Company with respect to the development of business opportunities and the implementation of business strategies to be agreed to by both parties. The extent of the services will be set forth in separate scopes of work, from time to time, to be prepared and mutually agreed to by the parties. As compensation for the services under the terms of the agreement, Consultant shall receive (i) $25,000 per month during the term of the agreement, (ii) 500,000 shares of restricted common stock upon execution of the agreement, and (iii) up to 2,500,000 shares of restricted common stock upon the achievement of predetermined milestones. The Consultant was also previously engaged by the Company between March 2015 and August 2016 to provide consulting services. The Consultant beneficially owns approximately 5.86% of the shares of the Company’s common stock issued and outstanding; and holds options to purchase 207,055 shares of the Company’s common stock, exercisable until January 14, 2021 at an exercise price of $0.06 per share. On October 31, 2019, the consulting agreement with the Consultant was terminated as a result of the Company no longer needing these services to be provided by an outside consultant. During the term of the agreement, the Company paid to the Consultant (i) $25,000 per month and issued (ii) 500,000 restricted shares of common stock at the execution of the agreement. The agreement also provided for the issuance of up to an additional 2,500,000 shares of restricted common stock upon the achievement of milestones that were to be determined by the Company and the Consultant during the term of the agreement. There are no early termination penalties incurred as a result of the termination of the consulting agreement. The Consultant may still be entitled to receive the Shares after termination of the Agreement, if the achievement of milestones that commenced during the term of the Agreement are completed after termination. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 10 — Related Party Transactions The following reflects the related party transactions during the three months ended March 31, 2020 and 2019. The Company’s Chief Financial Officer, Nicole Fernandez-McGovern, is one of the principals of Premier Financial Filings, a full-service financial printer. Premier Financial Filings provided contracted financial services to the Company and their related expenses have been included within general and administrative expenses. For the three months ended March 31, 2020 and 2019, Premier Financial Filings provided services to the Company resulting in fees of $2,605 and $2,674, respectively recorded in general and administrative costs. There are no payables due to Premier Financials Filings as of March 31, 2020 and December 31, 2019. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 11 – Subsequent Events Preferred C Share Conversions The Series C Preferred Stock has anti-dilution protection in the event there is a subsequent equity offering at a price that is less than $0.54. The Series E Convertible Preferred Stock (the “Preferred Stock”) issued in the offering described below has a $0.25 conversion price that triggered the Series C anti-dilution protection. As a result, on April 7, 2020, upon the consummation of the Preferred Stock offering, the initial conversion price of the Series C Preferred Stock was adjusted from $0.54 per share to $0.25 per share, which resulted in a total of 14,747,984 shares of common stock being issuable upon conversion of the remaining Series C Preferred Stock. During the months of April and May 2020, Alpha Capital Anstalt converted 3,312 shares of Series C Preferred Stock into 14,747,984 shares of common stock at a conversion price of $0.25. Warrant Conversions During the month of April 2020, Alpha Capital Anstalt converted 3,703,703 warrants into 2,497,739 shares of common stock at a conversion price of $0.25. Securities Purchase Agreement Entered in April On April 7, 2020, the Company entered into a Securities Purchase Agreement (the “Agreement”) with Alpha Capital Anstalt (“Alpha”). Pursuant to the terms of the Agreement, the Board of Directors of the Company (the “Board”) authorized 1,050 shares of a newly designated series of preferred stock, the Series E Convertible Preferred Stock (the “Preferred Stock”). The Preferred Stock is convertible at $0.25 per share into an aggregate of 4,200,000 shares of the common stock, par value $0.001 per share (the “Conversion Shares”). The purchase price for the Preferred Stock was $1,050,000 (the “Purchase Price”). The Company also entered into a Registration Rights Agreement, granting registration rights to the Purchaser with respect to the Conversion Shares and common stock underlying warrants currently owned by the Purchaser (the “Warrant Shares”). Registration Rights Pursuant to the terms of the Registration Rights Agreement, the Company was obligated to file an initial registration statement registering the Conversion Shares and the Warrant Shares (the “Registrable Securities”), no later than the 15 th th th The Company would be required to pay to Alpha an amount in cash, as partial liquidated damages and not as a penalty, equal to the product of 1.0% multiplied by the Purchase Price for failure to file the registration statement or have the registration statement declared effective by the dates set forth above. The parties agree that the maximum aggregate liquidated damages payable to Alpha shall be 6.0% of the Purchase Price paid by the Alpha pursuant to the Agreement. If the Company failed to pay any partial liquidated damages in full within seven days after the date payable, the Company will pay interest thereon at a rate of 18% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to Alpha, accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. Leak-Out Agreement On April 7, 2020, as a condition to the consummation of the Agreement, the Company entered into a Leak-Out Agreement with Mr. Bret Chilcott, a director and the President of the Company, and Alpha with respect to the shares Mr. Chilcott beneficially owns. The restriction on the disposition of the shares is for a period of seven months from the date of the closing of the Agreement. Thereafter, for a period of an additional six months, Mr. Chilcott may sell no more than $25,000 per calendar month of shares of Company common stock. Amendment to the Articles of Incorporation On April 2, 2020, the Company’s Board authorized 1,050 shares of the Preferred Stock. The Preferred Stock is convertible at $0.25 per share into an aggregate of 4,200,000 shares of the common stock. The Preferred Stock has liquidation rights senior to the common stock, but pari passu with the Series C Preferred Stock and the Series D Preferred Stock. The Preferred Stock has no voting rights. The conversion price adjusts for stock splits and combinations and is subject to anti-dilution protection for subsequent equity issuances until such time as no shares of Series E Preferred Stock are outstanding. The Certificate of Designation of the Series E Convertible Preferred Stock was filed with the State of Nevada on April 2, 2020. Filing of Registration Statement Pursuant to the terms of the Registration Rights Agreement executed on April 7, 2020, the Company filed an initial registration statement registering the Conversion Shares and the Warrant Shares on April 27, 2020. The Company’s registration statement was declared effective May 6, 2020. Approval of Compensation by Compensation Committee As announced on March 12, 2020, Mr. Barrett Mooney and Mr. Brett Chilcott resigned from their current roles, effective on May 5, 2020. Mr. Mooney now serves as Chairman of the Board, and Mr. Chilcott no longer serves in management of the Company. At the time of the announcement, the Compensation Committee of the Board of Directors and each of Messrs. Mooney and Chilcott were in discussions about compensation prior to the effective date of their resignation and thereafter. On April 16, 2020 the Compensation Committee agreed to the following terms: Mr. Barrett Mooney: ● March 6, 2020 through April 4, 2020 current salary and benefits; ● $50,000 in cash. $25,000 of which was paid in a lump sum in April 2020, and the balance will be paid in equal installments over a six month period beginning on May 5, 2020; ● Will remain eligible for bonuses of up to $15,000 as approved by the Board based upon certain revenue and operational targets; ● Commencing May 5, 2020 in his role as Chairman, will receive (i) a quarterly grant of 16,500 stock options at the fair market value of the stock on the issuance date vesting over two years and exercisable for a period of five years and (ii) reimbursement for travel expenses; and ● Will provide consulting services, as needed, at a fixed fee of $4,500 per month on a month-to-month basis plus reimbursement for travel expenses. Mr. Bret Chilcott: ● From May 5, 2020 through May 4, 2021, salary of $140,000 and benefits; and ● After May 4, 2021, for a period of 12 months, will provide consulting services, as needed, at a fixed fee of $4,500 per month on a month-to-month basis plus reimbursement for travel expenses. 2020 Executive Compensation Plan The Compensation Committee also approved a 2020 Executive Compensation Plan for Nicole Fernandez-McGovern, the Chief Financial Officer and EVP of Operations, and the Chief Executive Officer to be hired. The Plan is as follows, with the Cash Bonus, Option and Restricted Stock Units (RSUs) components to be dependent upon achieving certain to-be-determined financial and operational milestones: Chief Executive Officer Chief Financial Officer/ EVP of Operations Annual Salary $ 250,000 $ 200,000 Cash Bonus $ 50,000 $ 30,000 Stock Options (Quarterly Grants) 15,000 15,000 RSUs 150,000 125,000 Appointment of Chief Executive Officer and Compensatory Arrangements On April 28, 2020, the Company extended an offer of employment that was accepted by Mr. Michael Drozd to serve as the Company’s new Chief Executive Officer. Mr. Drozd will join the Company on or before June 1, 2020. The Company previously announced that Mr. Barrett Mooney would resign from his role as Chief Executive Officer effective as of May 5, 2020, but would remain with the Company as Chairman of the Board thereafter. In the event Mr. Drozd joins after May 5, 2020, Ms. Nicole Fernandez-McGovern, the Company’s Chief Financial Officer will act as Interim Chief Executive Officer until Mr. Drozd officially commences his new role on May 18, 2020. Ms. Fernandez-McGovern will not receive any additional compensation for serving as Interim Chief Executive Officer. From 2015 through 2019, Mr. Drozd served as President of Eurofins AgBio Division, a global business focused primarily on testing for the agriculture sector (seed, plant and animals) with an emphasis on using genetic analysis. From 2014 until 2015, he was Chief Operating Officer of Arbiom, a French biotechnology company where he restructured the organization, materially increasing overall efficiency and improving resource allocations through numerous measured steps and initiatives. Mr. Drozd served as President and CEO of Aseptia/Wright Foods from 2011 through 2014, a leading technology company in shelf-stable food processing and co-packaging. Mr. Drozd will receive a base salary of $235,000 per year, which shall be subject to annual performance review by the Compensation Committee of the Board and may be revised by the Committee, in its sole discretion. Mr. Drozd is entitled to receive an annual 20% bonus, which may be a mix of cash and stock options, based upon his performance as determined by certain metrics to be established by the Board and Mr. Drozd. He will receive an initial grant of 100,000 restricted stock units under the Company’s 2017 Omnibus Equity Incentive Plan (the “Equity Plan”), which will fully vest after one year of continued employment. Mr. Drozd is eligible to receive a quarterly award of 15,000 non-qualified stock options under the Equity Plan. At the time of issuance, the stock option award agreements will set forth the vesting, exercisability and exercise price of the stock options as of the date of the grants. On May 5, 2020, the Company announced that Mr. Michael Drozd who has been appointed to replace Mr. Mooney as Chief Executive Officer and will commence in that role on May 18, 2020. Until such time as Mr. Drozd assumes his role as Chief Executive Officer, Ms. Nicole Fernandez-McGovern, the Company’s current Chief Financial Officer, will also serve as Interim Chief Executive Officer, and thereafter, will continue in her role as Chief Financial Officer. Ms. Fernandez-McGovern will not receive any additional compensation for serving as Interim Chief Executive Officer. Securities Purchase Agreement Entered in May On May 11, 2020, the Company and Alpha Captial Anstalt entered into a securities purchase agreement (the “Purchase Agreement”) pursuant to which the Company agreed to sell to Alpha Captial Anstalt in a registered direct offering 2,400,000 shares of common stock, par value $0.001, and pre-funded warrants (the “Warrants”) to purchase up to 3,260,377 shares of common stock, for gross proceeds of approximately $6 million. The purchase price for each share of common stock is $1.06 and the purchase price for each Warrant is $1.059. The exercise price for each Warrant is $0.001. Net proceeds from the sale will be used to repurchase 262 shares of the Company’s Series E Preferred Stock, convertible into 1,046,699 shares of common stock, currently held by Alpha Captial Anstalt at a repurchase price of $1.06 per share of common stock. The Company expects to use the balance for working capital and general corporate purposes. The Shares and the Warrants are being offered by the Company pursuant to an effective shelf registration statement on Form S-3 (File No. 333-237860), which was declared effective on May 6, 2020. Pursuant to the terms of the Purchase Agreement, the Company has agreed to certain restrictions on future stock offerings, including that during the 60-day period following the closing, the Company will not issue (or enter into any agreement to issue) any shares of common stock or common stock equivalents, subject to certain exceptions. The exercise price of the Warrants and the shares of the common stock issuable upon the exercise thereof 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. The Warrants will be exercisable on a “cashless” basis in certain circumstances. |
Summary of Accounting Policies
Summary of Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation and Consolidation The interim condensed consolidated financial statements include the accounts of AgEagle Aerial Systems Inc. and its wholly-owned subsidiaries AgEagle Aerial, Inc., EnerJex Kansas, Inc., Black Sable Energy, LLC, and Black Raven Energy, Inc., was dissolved effective November 2019. All significant intercompany balances and transactions have been eliminated in consolidation. The summary of significant accounting policies presented below is designed to assist in understanding the Company’s interim condensed consolidated financial statements. Such interim condensed consolidated financial statements and accompanying notes are the representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“US GAAP”) in all material respects and have been consistently applied in preparing the accompanying interim condensed consolidated financial statements. |
Use of estimates | Use of Estimates – |
Fair Value of Financial Instruments | Fair Value of Financial Instruments – |
Cash and Cash Equivalents | Cash and Cash Equivalents – |
Receivables and Credit Policy | Receivables and Credit Polic – The Company estimates an allowance for doubtful accounts based upon an evaluation of the current status of receivables, historical experience, and other factors as necessary. It is reasonably possible that the Company’s estimate of the allowance for doubtful accounts will change. The Company determined that no allowance was necessary as of March 31, 2020 and December 31, 2019. |
Inventories | Inventorie – |
Goodwill and Intangible Assets | Goodwill and Intangible Assets – Intangible assets from acquired businesses are recognized at fair value on the acquisition date and consist of customer programs, trademarks, customer relationships, technology and other intangible assets. Customer programs include values assigned to major programs of acquired businesses and represent the aggregate value associated with the customer relationships, contracts, technology and trademarks underlying the associated program and are amortized on a straight-line basis over a period of expected cash flows used to measure fair value, which ranges from four to five years. |
Revenue Recognition and Concentration | Revenue Recognition and Concentration – Revenue from Contracts with Customers Under fixed-price contracts, the Company agrees to perform the specified work for a pre-determined price. To the extent the Company’s actual costs vary from the estimates upon which the price was negotiated, it will generate more or less profit or could incur a loss. The Company accounts for a contract after it has been approved by all parties to the arrangement, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The Company generally recognizes revenue on sales to customers, dealers and distributors upon satisfaction of performance obligations which generally occurs once controls transfer to customers, which is when product is shipped or delivered depending on specific shipping terms. Subscription services for use of the Company’s proprietary FarmLens HempOverview Sales concentration information for customers comprising more than 10% of the Company’s total net sales such customers is summarized below: Percent of total sales for three months Customers 2020 2019 Customer A 95.6 % 68.0 % Customer B — 29.1 % Accounts receivables due from Customer A and C comprised all of the accounts receivable as of March 31, 2019. The table below reflects our revenue for the periods indicated by product mix. For the three months ended March 31, Type 2020 2019 Drone Assembly and Product Sales $ 374,278 $ 38,083 Software Platform Sales 17,002 7,910 Total $ 391,280 $ 45,993 |
Vendor Concentration | Vendor Concentration – FarmLens |
Shipping Costs | Shipping Costs – |
Earnings Per Share | Earnings Per Share |
Potentially Dilutive Securities | Potentially Dilutive Securities |
Income Taxes | Income Taxes - |
Stock-Based Compensation Awards | Stock-Based Compensation Awards – “Compensation – Stock Compensation”, The Black-Scholes option-pricing model requires the input of certain assumptions that require the Company’s judgment, including the expected term and the expected stock price volatility of the underlying stock. The assumptions used in calculating the fair value of stock-based compensation represent management’s best estimates, but these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change resulting in the use of different assumptions, stock-based compensation expense could be materially different in the future. |
Recently Issued Accounting Standards | Recently Issued Accounting Pronouncements Adopted In January 2016, the FASB issued ASU 2016-01, Financial Instruments: Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, FASB issued Account Standards Update 2016-02 – Leases In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other In August 2018, the FASB issued ASU 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement Pending Adoption Other recent accounting pronouncements issued by FASB did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Summary of Accounting Policie_2
Summary of Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Sales concentration information | Sales concentration information for customers comprising more than 10% of the Company’s total net sales such customers is summarized below: Percent of total sales for three months Customers 2020 2019 Customer A 95.6 % 68.0 % Customer B — 29.1 % |
Revenue indicated by product mix | The table below reflects our revenue for the periods indicated by product mix. For the three months ended March 31, Type 2020 2019 Drone Assembly and Product Sales $ 374,278 $ 38,083 Software Platform Sales 17,002 7,910 Total $ 391,280 $ 45,993 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consist of the following at: March 31, December 31, Raw materials $ 75,432 $ 193,022 Work-in-process 40,113 26,456 Finished goods 10,508 11,689 Gross inventory $ 126,053 $ 231,167 Less obsolete reserve (10,000 ) (10,000 ) Total $ 116,053 $ 221,167 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment consist of the following at: March 31, December 31, Property and equipment $ 143,042 $ 140,758 Less accumulated depreciation (106,921 ) (102,982 ) $ 36,121 $ 37,776 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible assets were comprised of the following at March 31, 2020: Intangible Assets Estimated Life Gross Cost Accumulated Amortization Net Book Value Intellectual Property/Technology 5 yrs. $ 433,400 $ (137,243 ) $ 296,157 Customer Base 5 yrs. 72,000 (22,800 ) 49,200 Tradenames - Trademarks 5 yrs. 58,200 (18,430 ) 39,770 Non-compete agreement 4 yrs. 160,900 (63,690 ) 97,210 Carrying value as of March 31, 2020 $ 724,500 $ (242,163 ) $ 482,337 |
Future amortization | Future amortization is as follows for fiscal years ending: 2020 (months remaining) 2021 2022 2023 Intellectual Property/Technology $ 65,010 $ 86,680 $ 86,680 $ 57,786 Customer Base 10,800 14,400 14,400 9,600 Tradenames and Trademarks 8,730 11,640 11,640 7,760 Non-compete Agreement 30,169 40,225 26,817 — Total $ 114,709 $ 152,945 $ 139,537 $ 75,146 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | A summary of the options activity for the three months ended March 31, 2020 is as follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at January 1, 2020 2,480,470 $ 0.39 6.28 $ 378,111 Granted 87,000 0.41 5 — Outstanding at March 31, 2020 2,567,470 0.39 6 $ 381,158 Exercisable at period end 1,668,517 $ 0.38 5.64 $ 342,608 A summary of the options activity for the three months ended March 31, 2019 is as follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at January 1, 2019 1,494,158 $ 0.46 6.93 $ 409,678 Granted 540,000 0.42 8.68 — Exercised/Forfeited (70,438 ) 0.49 — — Outstanding at March 31, 2019 1,963,720 0.45 7.19 256,049 Exercisable at period end 1,101,835 $ 0.26 6.75 $ 256,049 |
Summary of Stock Options | A summary of the options activity for the year ended December 31, 2019 is as follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at January 1, 2019 1,494,158 $ 0.46 6.93 years $ 417 ,504 Granted 1,131,000 0.37 6.27 years — Exercised/Forfeited (144,688 ) 0.99 —years — Outstanding at December 31, 2019 2,480,470 0.39 6.28 years 378,111 Exercisable at period end 1,521,859 $ 0.36 6.10 years $ 301 ,051 A summary of the options activity for the years ended December 31, 2018 is as follows: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term Value Outstanding at January 1, 2018 1,134,830 $ 0.06 8.5 years $ — Granted 534,598 1.35 5.94 years $ — Cancelled (175,270 ) 0.60 —years $ — Outstanding at December 31, 2018 1,494,158 $ 0.46 6.93 years $ 417,504 Exercisable at end of the year 782,147 $ 0.22 7.07 years $ 356,979 |
Warrants to Purchase Common S_2
Warrants to Purchase Common Stock (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Notes to Financial Statements | |
Summary of activity related to warrants | A summary of activity related to warrants for the three months ended March 31, 2020 follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Outstanding at January 1, 2020 4,531,924 $ 0.72 4.05 Outstanding at March 31, 2020 4,531,924 0.72 3.80 Exercisable at March 31, 2020 4,531,924 0.72 3.80 A summary of activity related to warrants for the three months ended March 31, 2019 follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Outstanding at January 1, 2019 4,531,924 $ 0.72 5.05 Outstanding at March 31, 2019 4,531,924 0.72 5.05 Exercisable at March 31, 2019 4,531,924 0.72 5.05 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Schedule of cash Bonus, Option and RSUs | The Plan is as follows, with the Cash Bonus, Option and RSUs components to be dependent upon achieving certain to-be-determined financial and operational milestones: Chief Executive Officer Chief Financial Officer/ EVP of Operations Annual Salary $ 250,000 $ 200,000 Cash Bonus $ 50,000 $ 30,000 Stock Options (Quarterly Grants) 15,000 15,000 RSU 150,000 125,000 |
Summary of Accounting Policie_3
Summary of Accounting Policies (Details) - Sales Revenue, Net [Member] | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Customer A | ||
Concentration percentage | 95.60% | 68.00% |
Customer B | ||
Concentration percentage | 0.00% | 29.10% |
Summary of Accounting Policie_4
Summary of Accounting Policies (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues | $ 391,280 | $ 45,993 |
Product [Member] | ||
Revenues | 374,278 | 38,083 |
Software Platform Sales [Member] | ||
Revenues | $ 17,002 | $ 7,910 |
Summary of Accounting Policie_5
Summary of Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Summary Of Accounting Policies [Line Items] | |||
Cash equivalents | $ 0 | $ 0 | |
FDIC limit | 250,000 | ||
Allowance for doubtful accounts receivable | 0 | $ 0 | |
Estimated obsolescence and shrinkage of inventory | 10,000 | $ 10,369 | |
Shipping Costs | 301 | 758 | |
Research and Development Expenses | $ 38,948 | $ 0 | |
Warrant [Member] | |||
Summary Of Accounting Policies [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 4,531,924 | 4,531,924 | |
Option [Member] | |||
Summary Of Accounting Policies [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,569,970 | 1,963,720 | |
Series C Convertible Preferred Stock [Member] | |||
Summary Of Accounting Policies [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,312 | 3,636 | |
Common Stock [Member] | |||
Summary Of Accounting Policies [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 6,133,333 | ||
Convertible notes [Member] | |||
Summary Of Accounting Policies [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 6,733,333 |
Inventories (Details)
Inventories (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 75,432 | $ 193,022 |
Work-in-process | 40,113 | 26,456 |
Finished goods | 10,508 | 11,689 |
Gross Inventory | 126,053 | 231,167 |
Less obsolete reserve | (10,000) | (10,000) |
Total inventory | $ 116,053 | $ 221,167 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Abstract] | ||
Property and equipment | $ 143,042 | $ 140,758 |
Less accumulated depreciation | (106,921) | (102,982) |
Property and equipment, net | $ 36,121 | $ 37,776 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 3,939 | $ 3,232 |
Intangible Assets (Details)
Intangible Assets (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Gross Cost | $ 724,500 |
Accumulated Amortization | (242,163) |
Net Book Value | $ 482,337 |
Intellectual Property/Technology [Member] | |
Estimated Life | 5 years |
Gross Cost | $ 433,400 |
Accumulated Amortization | (137,243) |
Net Book Value | $ 296,157 |
Customer Base [Member] | |
Estimated Life | 5 years |
Gross Cost | $ 72,000 |
Accumulated Amortization | (22,800) |
Net Book Value | $ 49,200 |
Trademarks and Trade Names [Member] | |
Estimated Life | 5 years |
Gross Cost | $ 58,200 |
Accumulated Amortization | (18,430) |
Net Book Value | $ 39,770 |
Non-compete agreement [Member] | |
Estimated Life | 4 years |
Gross Cost | $ 160,900 |
Accumulated Amortization | (63,690) |
Net Book Value | $ 97,210 |
Intangible Assets (Details 1)
Intangible Assets (Details 1) | Mar. 31, 2020USD ($) |
2020 (months remaining) | $ 114,709 |
2021 | 152,945 |
2022 | 139,537 |
2023 | 75,146 |
Intellectual Property/Technology [Member] | |
2020 (months remaining) | 65,010 |
2021 | 86,680 |
2022 | 86,680 |
2023 | 57,786 |
Customer Base [Member] | |
2020 (months remaining) | 10,800 |
2021 | 14,400 |
2022 | 14,400 |
2023 | 9,600 |
Trademarks and Trade Names [Member] | |
2020 (months remaining) | 8,730 |
2021 | 11,640 |
2022 | 11,640 |
2023 | 7,760 |
Non-compete agreement [Member] | |
2020 (months remaining) | 30,169 |
2021 | 40,225 |
2022 | 26,817 |
2023 | $ 0 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 38,236 | $ 41,836 |
Weighted average remaining amortization period | 3 years 6 months |
Promissory Note (Details Narrat
Promissory Note (Details Narrative) - EnerJex | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Debt Instrument [Line Items] | |
Principal amount | $ 125,556 |
Accrued interest | 4,171 |
Convertible Notes Payable | $ 9,028 |
Maturity date | Mar. 27, 2019 |
Interest expenses | $ 462 |
Principal payments | $ 31,970 |
Equity (Details)
Equity (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Dividend yield | 0.00% |
Expected life | 3 years 6 months |
Expected volatility | 90.07% |
Risk-free interest rate | 0.29% |
Equity (Details 1)
Equity (Details 1) - USD ($) | Oct. 04, 2017 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Options | |||||
Options Outstanding, Beginning Balance | 2,480,470 | 1,494,158 | 1,494,158 | ||
Options Granted | 87,000 | 540,000 | |||
Options Exercised/Forfeited | (70,438) | ||||
Options Outstanding, Ending Balance | 2,567,470 | 1,963,720 | 2,480,470 | 1,494,158 | |
Options Exercisable at end | 1,668,517 | 1,101,835 | |||
Weighted Avg. Exercise Price | |||||
Weighted Avg. Exercise Price Outstanding, Beginning Balance | $ 0.39 | $ 0.46 | $ 0.46 | ||
Weighted Avg. Exercise Price Granted | $ 0.06 | 0.41 | 0.42 | ||
Weighted Avg. Exercise Price Exercised/Forfeited | 0.49 | ||||
Weighted Avg. Exercise Price Outstanding, Ending balance | 0.39 | 0.45 | $ 0.39 | $ 0.46 | |
Weighted Avg. Exercise Price Exercisable at end | $ 0.38 | $ 0.26 | |||
Weighted Average Remaining Contractual Term | |||||
Weighted Average Remaining Contractual Term Outstanding | 6 years | 7 years 2 months 8 days | 6 years 3 months 11 days | 6 years 10 months 25 days | |
Weighted Average Remaining Contractual Term Granted | 5 years | 8 years 8 months 5 days | |||
Weighted Average Remaining Contractual Term Exercisable at end | 5 years 7 months 21 days | 6 years 9 months | |||
Aggregate Intrinsic Value | |||||
Aggregate Intrinsic Value Outstanding, Beginning Balance | $ 378,111 | $ 409,678 | $ 409,678 | ||
Aggregate Intrinsic Value Granted | 0 | 0 | |||
Aggregate Intrinsic Value Granted Exercised/Forfeited | 0 | ||||
Aggregate Intrinsic Value Outstanding, at end | 381,158 | 256,049 | $ 378,111 | $ 409,678 | |
Aggregate Intrinsic Value Exercisable at end | $ 342,608 | $ 256,049 |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) | May 11, 2018 | Oct. 04, 2017 | Apr. 30, 2018 | Nov. 21, 2017 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 |
Option available under plan | 3,000,000 | ||||||
Cash compensation | $ 500,000 | ||||||
Option granted | 87,000 | 540,000 | |||||
Term | 5 years | 8 years 8 months 5 days | |||||
Exercise price | $ 0.06 | $ 0.41 | $ 0.42 | ||||
Modification of options to purchase common stock | 207,055 | ||||||
Stock-based compensation expense | $ 54,635 | $ 60,920 | |||||
Accumulated accrued dividends | 40,444 | $ 40,000 | |||||
Accrued dividends | 204,000 | $ 163,555 | |||||
Employees and directors one [Member] | |||||||
Option to purchase stock | $ 87,000 | ||||||
Exercise price | $ .41 | ||||||
Fair-value of options | $ 21,492 | ||||||
Expiration date | Mar. 30, 2025 | ||||||
Stock-based compensation expense | $ 0 | ||||||
Alpha Capital Anstalt [Member] | |||||||
Common stock issued upon conversion of preferred stock (shares) | 1,900,000 | ||||||
Preferred stock converted (shares) | 1,026 | ||||||
Alpha Capital Anstalt [Member] | Series C Convertible Preferred Stock [Member] | |||||||
Common stock issued upon conversion of preferred stock (shares) | 350,000 | ||||||
Preferred stock converted (shares) | 189 | ||||||
Alpha Capital Anstalt [Member] | Series C Convertible Preferred Stock [Member] | |||||||
Common stock issued upon conversion of preferred stock (shares) | 2,879 | 408,552 | |||||
Common stock issued upon conversion of preferred stock (shares) | $ 250,000 | $ 2,612,245 | |||||
Additional Common stock issued upon conversion of preferred stock (shares) | 163,265 | ||||||
Additional Preferred stock converted (shares) | 250 | ||||||
AgEagle | Series C Convertible Preferred Stock [Member] | |||||||
Common stock issued upon conversion of preferred stock (shares) | 1,471,425 | ||||||
Preferred stock converted (shares) | 1,624 | ||||||
Additional Common stock issued upon conversion of preferred stock (shares) | 3,020,797 | ||||||
Additional Preferred stock converted (shares) | 4,000 | ||||||
Financing cost | $ 4,000,000 | ||||||
AgEagle | Series A Preferred Stock [Member] | |||||||
Common stock issued upon conversion of preferred stock (shares) | 902,186 |
Warrants to Purchase Common S_3
Warrants to Purchase Common Stock (Details) - $ / shares | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Warrants | ||||
Warrants Outstanding, Beginning Balance | 3,703,703 | 4,531,924 | 4,531,924 | |
Warrants Outstanding, Ending Balance | 3,703,703 | 4,531,924 | 3,703,703 | 4,531,924 |
Warrants Exercisable at end | 4,531,924 | 4,531,924 | ||
Weighted Avg. Exercise Price | ||||
Weighted Avg. Exercise Price Outstanding, Beginning Balance | $ 0.72 | $ 0.72 | $ 0.72 | |
Weighted Avg. Exercise Price Outstanding, Ending balance | 0.72 | 0.72 | $ 0.72 | $ 0.72 |
Weighted Avg. Exercise Price Exercisable at end | $ 0.72 | $ 0.72 | ||
Weighted-Average Remaining Contractual Term | ||||
Weighted-Average Remaining Contractual Term Outstanding | 3 years 9 months 18 days | 5 years 18 days | 4 years 18 days | 5 years 18 days |
Weighted-Average Remaining Contractual Term Exercisable at end | 3 years 9 months 18 days | 5 years 18 days |
Commitments & Contingencies (De
Commitments & Contingencies (Details Narrative) - USD ($) | May 03, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
Commitments and Contingencies Disclosure [Line Items] | |||
Operating Leases, Rent Expense | $ 7,500 | $ 13,600 | |
Periodic payment | $ 500 | ||
Lease termination date | Sep. 30, 2019 | ||
Consulting Agreement [Member] | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Option Exercise price | $ 0.06 | ||
Option to purchase stock | $ 207,055 | ||
Expiration date | Jan. 14, 2021 | ||
Consulting Agreement [Member] | GreenBlock Capitalt [Member] | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Consulting, Description | Consultant shall receive (i) $25,000 per month during the term of the agreement, (ii) 500,000 shares of restricted common stock upon execution of the agreement, and (iii) up to 2,500,000 shares of restricted common stock upon the achievement of predetermined milestones. |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
General and administrative expenses | $ 445,531 | $ 474,902 |
Premier Financial Filings | Chief Financial Officer | Nicole Fernandez-McGovern | ||
General and administrative expenses | $ 2,605 | $ 2,674 |
Subsequent Events (Details)
Subsequent Events (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Chief Executive Officer [Member] | |
Annual Salary | $ 250,000 |
Cash Bonus | 50,000 |
Stock Options (Quarterly Grants) | 15,000 |
RSU | 150,000 |
Chief Financial Officer [Member] | |
Annual Salary | 200,000 |
Cash Bonus | 30,000 |
Stock Options (Quarterly Grants) | 15,000 |
RSU | $ 125,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Apr. 07, 2020 | Apr. 02, 2020 | Apr. 30, 2020 | Apr. 16, 2020 | Apr. 30, 2018 | Nov. 21, 2017 | May 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 | |||||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||||
Series C Convertible Preferred Stock [Member] | |||||||||
Preferred stock, shares authorized | 10,000 | 10,000 | |||||||
Alpha Capital Anstalt [Member] | |||||||||
Common stock issued upon conversion of preferred stock (shares) | 1,900,000 | ||||||||
Preferred stock converted (shares) | 1,026 | ||||||||
Alpha Capital Anstalt [Member] | Series C Convertible Preferred Stock [Member] | |||||||||
Common stock issued upon conversion of preferred stock (shares) | 2,879 | 408,552 | |||||||
Subsequent Event [Member] | |||||||||
Compensation Committee description | On April 16, 2020 the Compensation Committee agreed to the following terms: ● March 6, 2020 through April 4, 2020 current salary and benefits; ●$50,000 in cash. $25,000 of which was paid in a lump sum in April 2020, and the balance will be paid in equal installments over a six month period beginning on May 5, 2020; ● Will remain eligible for bonuses of up to $15,000 as approved by the Board based upon certain revenue and operational targets; ● Commencing May 5, 2020 in his role as Chairman, will receive (i) a quarterly grant of 16,500 stock options at the fair market value of the stock on the issuance date vesting over two years and exercisable for a period of five years and (ii) reimbursement for travel expenses; and ● Will provide consulting services, as needed, at a fixed fee of $4,500 per month on a month-to-month basis plus reimbursement for travel expenses. ● From May 5, 2020 through May 4, 2021, salary of $140,000 and benefits; and ● After May 4, 2021, for a period of 12 months, will provide consulting services, as needed, at a fixed fee of $4,500 per month on a month-to-month basis plus reimbursement for travel expenses. | ||||||||
Subsequent Event [Member] | Series E Convertible Preferred Stock [Member] | |||||||||
Common stock issued upon conversion of preferred stock (shares) | 4,200,000 | ||||||||
Preferred stock, shares authorized | 1,050 | ||||||||
Conversion Price | $ 0.25 | ||||||||
Subsequent Event [Member] | Series E Convertible Preferred Stock [Member] | Securities Purchase Agreement [Member] | |||||||||
Common stock issued upon conversion of preferred stock (shares) | 4,200,000 | ||||||||
Preferred stock, shares authorized | 1,050 | ||||||||
Conversion Price | $ 0.25 | ||||||||
Common stock, par value | $ 0.001 | ||||||||
Purchase Price | $ 1,050,000 | ||||||||
Subsequent Event [Member] | Alpha Capital Anstalt [Member] | |||||||||
Common stock issued upon conversion of preferred stock (shares) | 2,497,739 | ||||||||
Number of warrants converted | 3,703,703 | ||||||||
Subsequent Event [Member] | Alpha Capital Anstalt [Member] | Series C Convertible Preferred Stock [Member] | |||||||||
Common stock issued upon conversion of preferred stock (shares) | 14,747,984 | ||||||||
Preferred stock converted (shares) | 3,312 |