Q3 2021 Ageagle Aerial Systems Inc Earnings Call

We offer customers in the new markets we serve.

Now moving to the bottom line I think those net loss available to common stockholders was $11 4 million or 17 cents loss per share for the nine months ended September 32021, compared to a net loss available to common stockholders of approximately $11 3 million or 33 loss per share for the same nine months period.

In 2020.

Our cash position as of September 32021 was approximately $32 2 million up from approximately $23 9 million as of the end of 2020.

In addition, total stockholders equity increased substantially to approximately $94 2 million as of September 32021, compared to approximately $26 4 million as of the end of 2020.

Lastly, I want to provide an update on our capital raising efforts from May 29, 2021 through September 32021, we raised approximately $30 9 million by using our ATM with our co agents people and Raymond James These assets have allowed us the resources to pursue our goal of building a full stack solution that we believe will provide us.

<unk> opportunities for growth axis, our target verticals energy construction, agriculture, and government ultimately delivering increased substantial value to our shareholders now I'll pass it back to Randy go over a few details of our operational highlights for the quarter Brandon.

Thanks Nicole.

During the third quarter, we focused on executing business strategy centered on designing and delivering a best in class full stack drilling solution. This includes airframes sensors and software that address mission critical applications in the energy construction agriculture and government verticals.

This focus has led the announcement of a number of material developments at AG Eagle.

Let's start with our sensor sales, which are exceeding all of our expectations. This year and the exciting news that we have launched two new highly advanced drilling sensors that I'd like to highlight.

The first one we introduced was the red edge Pete This new sensor builds on the legacy of the Red edge sensor offering three times the capture speed twice the spatial resolution, while adding the power of a panchromatic band to double the output data resolution the red edge P. The single camera solution that is compatible with a wide array of.

Drone aircraft ranging from large to small fixed wing to small multi rotor.

It captures multi spectral and RGB imagery with an optimized field of view and capturing this solution seamlessly integrates and all color imager synchronized multispectral imagery to enable pixel wind output and previously unattainable resolutions, all while maintaining the efficiency and reliability of its red edge.

Yeah.

So <unk> had been purpose built to provide comprehensive.

Season long plant cannot be analysis over larger acreage at a spatial resolution that is considered among the highest in the industry.

In addition, this new center is highly complementary to our measured graphical software, enabling the delivery of actionable data outputs from the sensor.

The other sensor that we launched just last week was the new Ultra P T.

This is an optimized three in one solution for advanced remote sensing and agricultural research.

The New center seamlessly integrates and ultra high resolution panchromatic imager, a built in radiometric thermal imager and five discrete spectral bands to produce synchronized outputs such as RGB color crop bigger heat maps and high resolution panchromatic in just one flight.

Offering twice the spatial resolution of the prior album sensor often P. T will empower users with deeper analytical capabilities and broader more diverse applications.

These features will help enable them to certain issues at the plant level, even in the early growth stages and conduct early stage standard counting as well as season long soil monitoring among other critical applications.

Overall, it's been exciting to see the imminent innovation coming out of <unk> over the past couple of months and I'm very proud of the team in Seattle.

Based on strong sales and customer feedback, we believe that we have industry, leading sensor capabilities that are highly complementary to the other components of our full stack drone solution.

Now I'm really excited to talk about the incredible innovations coming out of our software division.

This morning, we announced a game changing partnership and collaboration with wing the drone delivery unit of Google's parent company alphabet.

Through this partnership we will seamlessly integrate open sky wings airspace access application into measure ground control.

Open Sky makes it easy for our customers to comply with aerospace rules and regulations and request authorization to flying controlled aerospace.

Time wherever open sky is available.

This collaboration is very important as we continue discussions with enterprise and government customers, which require accurate situational awareness to operate their drone programs safely and compliant way.

Integrated open skies from wing into measured ground control is expected to materially enhance the capabilities and underpinning valuation value proposition aggregate offers to these customers.

We believe our software will provide the backbone of our full stack solution and provide the analytical capabilities necessary to realize the full value of our hardware, including our sensors and fixed wing dropped.

With that in mind, we will soon make available to current and new customers. The integration of our Atlas software capabilities into measure crowd control.

This new capability and integration with Microsoft sensors will include superior tools for flight planning.

Autonomous data capture multispectral imaging processing analysis, and collaboration enterprise integrations and much more now.

Now everyone from the individual farmer to the large agribusiness can benefit from fully integrated sensor and software solutions and we're looking forward to launching that new product at the end of Q4.

Although we are still in the early days with wing and our integration with Microsoft and <unk>. We are very optimistic with the progress. We've made so far and look forward to the growth opportunities that we believe will come with the enhanced capabilities of our software solutions.

Last but not least I'd like to highlight the significant progress we've made on the drawing manufacturing side of our business.

As many of you are aware in mid October we announced that we acquired centralized from parent, making our third major acquisition this year.

<unk> was founded in 2009 and have since developed a strong reputation as one of the world's leading fixed wing drone manufacturers.

In 2020 since wide generated total revenues of approximately $12 5 million and employs approximately 90 highly talented members in Luzon, Switzerland, and Raleigh North Carolina.

Our company develops and produced a proprietary line of <unk> branded high performance fixed wing drones.

These drones are ultra light and can be operated autonomously.

The new utilized by thousands of customers around the world in energy construction.

Culture, and government and other industry verticals to collect actionable aerial intelligence.

Adding some slide in the AG will family is an ideal strategic fit for our company as it is expected to accelerate our core growth strategy, which is focused on delivering full stack drone solutions across multiple industries and end markets.

In addition, since why brings aggregate solid aerospace engineering talent that excels in advanced research and development.

A well established global reseller network and a strong portfolio of intellectual property.

We firmly believe that this acquisition rounds out our full stack solution and we look forward to the growth opportunities that we believe having these new capabilities will open up.

Our acquisition of Central has also given our government vertical strong start on October 29 of this year, we announced that <unk> has been named to the Blue Suas 2.0 list by the Department of Defense's Defense innovation unit or <unk>.

As part of the Blue Suas to point out registration qualification process.

<unk> successfully completed two demonstrations for U S government officials to highlight the unique strengths and capabilities of the EBIT Tac.

In late July 2021, and initial technical demonstration took place at Fort Hunter Legacy U S Army reserves largest training installation, where centralized EBIT Tac underwent various types of testing and evaluation.

In mid September 2021, Central I conducted a second demonstration at the U S Air Force Academy in Colorado, consisting of various flight demos at the EBIT Tac for the purpose of testing and evaluation excuse me testing and evaluating the systems capabilities and adverse and high altitude environments.

<unk> performed incredibly well in these initial tests and we expect to complete the registration process. Prior to the end of this year completely opening up opportunities throughout the United States government.

Through centralized innovative EBIT Tac Shutterfly will become an important player in drone domestic industrial base of the U S and its allies, helping to ensure delivery of secure tactical mapping and ISR solutions. The department of defense and other government entities will come to depend on.

Now on to some of the corporate initiatives we are working.

In addition to the tremendous talent and expertise we've added to the aggregate team through acquisitions. This year. We're also expanding our team through a number of key hires.

Recently, we welcomed several new engineers and developers to our sensor and software teams and we expanded our corporate team to equip new VP of people in our corporate controller.

How do you capable workforce that is invigorated by the growth opportunities in front of us is going to be vital to the success of this company and we are confident in the team that we're putting together.

We are still actively seeking a players and I encourage folks to view our career opportunities on the aggregate website to learn more about these exciting position.

As we are hard at work expanding our team and integrating these recent acquisitions.

We're also focused on maintaining a culture that is focused on one company with one vision.

Unifying micro sense measure centralized agnico will create powerful synergies and efficiencies, allowing us to provide customers with truly world class full stack drone solutions that are scalable.

Helped to optimize workflow productivity and workforce safety.

And provide tangible cost benefits and Swift returns on our customers' drone program investments.

Moreover, by teaming with other best in class technology solutions providers such as wing.

We can work together to achieve broad global market adoption of drone solutions.

Before we move to the Q&A portion of the call I would like to come on comment on president by the signing of a landmark one two trillion dollars infrastructure investment and jobs Act today Bill approved by both units have to toss representatives and the U S Senate.

With this new legislation allocating approximately $110 billion for construction repair and monetization of roads Railways bridges electric grids and other major infrastructure projects. The U S commercial drone industry should be bracing for potentially profound positive impact and growth acceleration.

Given us enterprise drone programs have already proven their invaluable using unmanned aerial inspection surveying and mapping among other applications within the construction energy and government sectors.

It can be concluded that leading American based drone solution providers, including aggregate <unk> are poised to benefit from the billions of dollars that will begin flowing into government sponsored infrastructure projects over the next several years.

I look forward to keep you all apprised of the progress we made throughout the journey to ultimately drive shareholder value.

I'll return for some closing remarks, but I'd like to turn it back to Nicole for our prepared Q&A session the call over to you.

Thanks, Brandon, let's address some questions that we've received in the earlier days.

Our first question.

Now that you have made three acquisitions to complete your fault.

Full stack solution do you anticipate any more M&A activity in the future. If so what are the solutions component do you feel that you would need to buy rather than build out in house.

Brendan.

Thanks, Nicole we've maintained since the beginning of this year that pursuing applications to remain a key growth strategy for AG Eagle.

However, we've also stated that we were taking a very thoughtful approach to every opportunity ensuring that the potential acquisitions will support future organic growth and are additive to building best in class full stack drone solutions for our customers.

It's also very important that acquisitions create long term shareholder value.

And similar to the new relationship with wing, we also intend to explore and pursue collaborative strategic partnerships with other technology companies, if and when it makes sense to do so in a tangible value and improved functionality and capabilities to our products and value for our customers.

Thanks, Brandon and that was a great one.

What are your plans for the Wichita manufacturing facility going forward.

Thanks, Nicole this past week I was proud to host congressmen, Ron <unk>, our local representative at the Wichita facility.

He was joined by my Fellow Board members and members of the measure micro sent in centralized teams to provide a capability briefing and discuss how we can work with the Congress and the entire Kansas congressional delegation to further enhance our value proposition for government customers.

At the heart of those capabilities is our ability to manufacture airframes and centers here in the United States enhancing our domestic industrial base and bringing high tech well paying jobs wherever aggregate has facilities as we work on integrating micro sense measuring centralized teams legal share more news on how we're going to support that mission.

Great next question is with your solutions being applicable across a variety of industries are there any plans to rebrand the company away from its current aggregate centric branding.

Thanks Nicole.

Having made three acquisitions in measurably, increasing our head count already this year. Our current focus is and shall remain on integrating all of our business groups into one company that being said, we are listening to our customers our shareholders and the market on how we are perceived as a company and what we can do to improve our position and shareholder value.

Perfect.

Question as you continue to expand your team in an incredibly tight labor market have you run into issues, finding our hiring people with the necessary skill set.

So competition for top quality talent is fierce right now we are working to make aggregate one of the best places to work by offering competitive salaries high quality benefits professional development opportunities and most importantly, the ability to make a mark in the exciting and fast paced drone industry.

We've enjoyed quite a bit of success in our recruiting and hiring efforts in 2021 and expected. The success will continue into 2022.

Is it readily apparent that there are lots of qualified talented people who are actively looking to capitalize on new career opportunities in the growing drone industry and in particular with leading companies like AGGY go.

Given that we now have business operations globally and are a high growth mode. We expect that we will be offering plenty of exciting opportunities well into the future and I hope everyone checks out our website for those exciting openings.

So our last question for today is can you speak to the supply chain constraints that are currently impacting or that you anticipate impacting your ability to deliver a sensor or John solutions to customers.

Thanks, Nicole well this has been top of mind for many people and yes like many companies we've experienced our fair share of supply chain constraints.

However, we continue to launch new products on in your schedule and I remain confident that we can identify alternative suppliers, if and when necessary. We are keeping a very close eye on this critical issue that will move quickly to address as necessary.

So this concludes the Q&A session.

Before we end the webcast I just want to reiterate our vision for the future.

First we are growth minded.

With a strong foundation is a known drone solutions company and more than a decade of proven experience agnico is uniquely positioned to offer best in class solutions to legacy and emerging industries through product innovation, R&D acquisitions and strategic partnerships our.

Our reputation as an American drone technology companies sets us apart and positions us to become a dominant force in the market.

Second we believe our deep bench of drone expertise on the team puts us in the pole position to benefit from regulatory changes that will allow our customers to fly drones autonomously in more places than ever.

These autonomous drones will collect high quality data and applications as varied as pipeline inspection as design construction surveys leaf level crop health and tap tactical mapping for the Warfighter.

Lastly, this is one company with one vision.

We believe our employees are passionate experienced professionals, who are building the solution that will pave the way to an autonomous future robots. We trust that together, we can build a diverse collaborative resilience innovation and innovative culture intent on winning.

With that I'd like to thank all of you for joining our webcast today and I'd like to thank all of our shareholders for their continued support we look forward to continuing to share our progress operator back to you.

Thank you, Brian and ladies and gentlemen. This does conclude today's teleconference. You may disconnect. Your lines. Your lines at this time. Thank you for your participation and have a great day.

[music].