AgEagle Aerial Systems, Inc.

Good day, everyone, and thank you for participating in today's conference call. Joining us today from AgEagle is Chief Executive Officer and Chairman of the Board Barrett Mooney and Nicole Fernandez McGovern, AgEagle's Chief Financial Officer and Executive Vice President of Operations. Following Barrett's prepared remarks, both company officers will respond to questions that were previously submitted via email by analysts and investors. Before I turn it over to Barrett, I would like to remind you that during today's call, including the question and answer session, statements that are not historical facts, including any projections, statements regarding future events or future financial performance, or statements of intent or belief, are forward-looking statements and are covered by the safe harbor disclaimers contained in the company's public filings with the SEC. Actual outcomes and results may differ materially from what is expressed in or implied by these forward-looking statements. With that said, I'll turn the call over to AgEagle CEO Barrett. Please go ahead.

Thank you, and good afternoon, everyone. I wanted to start off this webcast by thanking all our employees across the globe. We've had to face unexpected and unprecedented challenges throughout the past two years, But despite these hard-hitting and taxing obstacles, our team has risen to the occasion and made transformative progress in positioning AgEagle to be a leader in an ever-evolving and fast-paced industry. Your tireless support and dedication to executing our growth strategy has not gone unnoticed, and on behalf of the board and management team, we thank you all. Since initially embarking on this journey as a public company in 2018, I truly believe we have established a strong foundation with the necessary technical, operational, and commercial capabilities supported by our team of world-class talent to make meaningful strides this year and beyond. Before we dive into our goals and objectives for the future, I wanted to highlight all the progress we made during 2021. While I was only recently reappointed as CEO, in 2021, I sat in the chairman seat, keeping my finger on the pulse of the company and also being involved in the strategic decision-making process as we laid the groundwork for an autonomous full-stack drone solution this past year. I want to ensure all our long-term shareholders have a complete understanding of what we did, but most importantly, why we did it. So with that, let's jump right into it. In 2021, we were focused on preparing our company for growth opportunities to utilize drones and data analytics to drive actionable insights for a variety of applications and industries. Our work was centered on acquiring and integrating complementary companies to round out our full-stack platform, growing our talented team across the globe, introducing new products to the market, and deepening existing relationships while simultaneously establishing new connections with customers and peers around the world. Early last year, we acquired Micasense for their best-in-class advanced drone sensors. Micasense's patented high-precision thermal and multispectral sensors helped serve the aerial mapping and analytical needs of companies across a variety of industries, most notably in agriculture. With distribution in over 70 countries, we integrated Micasense and its technologies to bolster our offerings to existing customers while having an expanding product portfolio to market to potential new customers. Our engineers continue to push boundaries within their product capabilities, and our efforts resulted in two new sensors that we introduced in the fourth quarter. the Red Edge P and the Altum PT. Both of these sensors were built on our own proprietary circuit boards, designed in-house and manufactured exclusively for AgEagle. The leap in technical capabilities, thanks to an in-house design and produce system on module, can't be understated. With our new architecture, we are positioned to build solutions for a variety of industries with unique edge computing technology. We believe these sensors represent revolutionary leaps forward in combining resolution, and panchromatic capabilities to multispectral camera technology and will better serve our customers' needs long into the future. We anticipate these sensors will be very popular as we have begun seeing growing demand for these two products already early in 2022. Then in April of last year, to help bolster and develop our software offering, we acquired the award-winning aerial intelligence solutions company, Measure Global. Recognized for its cloud-based operating system, Ground Control, The acquisition greatly complements our existing hardware and data collection platform. Software is a key component to expanding AgEagle's reach. Connecting disparate hardware data points to insights and intelligence is at the core of what AgEagle software development has always focused on. As we move forward in becoming a global leader in end-to-end robotic solutions, we need to be able to offer a comprehensive user ecosystem for our customers to operate out of. The acquisition of Measure allowed us to leap forward with their existing software capabilities already validated by their world-class customer base. That includes many Fortune 500 companies, including Marathon Pipeline, the U.S. Air Force, and too many to name here. In November, with the software solutions that Measure provides, we announced that we teamed with Wing to integrate the open sky into ground control. This partnership materially enhances the capabilities that our platform offers, to customers by utilizing OpenSky's technology to make it easy for drone flyers to abide by airspace rules and regulations, as well as request authorization to fly in controlled airspace in near real time. As our ecosystem continues to expand, we will look to partnerships like this to not only push forward our company, but the industry as a whole. Our final acquisition of last year came in October when we acquired SenseFly, the developer of EB-branded high-performance fixed-wing drones. Headquartered in Luzon, Switzerland, SenseFly brings to our company world-renowned expertise in the fixed-wing drone space, as well as existing revenue to help enhance our growth strategy moving into next year. Since closing the acquisition, we have worked tirelessly to integrate their existing product line with the opportunities we've identified stateside. Soon after, SenseFly was named to the blue SUAS 2.0 list of drone suppliers by the U.S. Defense Innovation Unit. This project aims to bring greater variety of small unmanned aircraft systems to the Department of Defense as well as other U.S. government entities. After multiple successful demonstrations and months of testing our EB-TAC fixed-wing drone with U.S. government officials, we became the first approved drone to be added to the DIU Blue UAS cleared list. This represents a huge step forward in the validation of our products with our EB-TAC drone now available for purchase by U.S. government agencies, and all branches of the military on the GSA through our partner resellers. While we continue to integrate our acquisitions into one cohesive offering, we also spend time establishing and deepening new and existing partnerships. We continue to nurture our network of approximately 200 resellers in 75 countries worldwide, which helps us organically grow revenue year over year. These relationships are going to be critical as we move into our next phase of growth. Our achievements throughout the year would not have been made possible without the commitment of our talented team now stationed around the world. From the end of 2020, we have grown to over 150 full-time employees. Over 70% of our expanded employee base now consists of highly experienced engineers and data scientists that are considered experts in their respective fields. Our company is centered around emerging and innovative technologies that are pushed forward by the expert team that we work with every day. Without their expertise, we would not be where we are today. In addition to our growth through acquisition achievements, we also realized significant milestones on our capital market strategy. In May, we filed a $200 million shelf registration to provide a clear pathway for funding our integration and growth initiatives. Through this process, we named Stiefel and Raymond James as our lead investment bankers who have been instrumental in guiding and executing our funding strategies. Then in June, we were added to the Russell 3000 Index, which is used by institutional investors for index funds and as a benchmark for active investment strategies. Being included in the Russell 3000 Index greatly expanded our investor reach and has helped to increase awareness of AgEagle within the institutional investment community. Overall, we made significant strides in 2021 to lay a strong foundation and set us up for success with everything we were able to accomplish I'm very pleased to have stepped back into an operator role as CEO to unlike and catalyze more value with a clear goal of driving profitable revenue growth. As I stated in my recent shareholder letter, I'm very aware of the negative optics that come with leadership turnover that AgEagle has experienced over the past few years. However, I want to reiterate my commitments to the company and my excitement for the growth opportunities on the horizon. It's been incredible to see AgEagle transform from a small drone manufacturer based in Neodesha, Kansas, into an NYSE listed company that has a global team developing and delivering full stack autonomous robotic solutions and array of critical industries. I fully intend to remain in a hands-on leadership position, ensuring the execution of our growth strategy. This vision not only includes drones, but an entire ecosystem that supports autonomous robotics capabilities to help our customers perform their work as efficiently as possible. While our 2021 year-over-year revenue growth was fueled by the successful execution of our growth through acquisition strategy, we anticipate our trajectory will be accelerated by numerous organic growth initiatives in 2022 and beyond. Before I share more details of our growth plans, I'd like to turn it over to our CFO, Nicole Fernandez-McGovern, to provide a recap of our 2021 financial performance. Nicole, over to you.

Thanks, Barrett, and thank you all for joining us today. Yesterday, we filed our 10-K with the SEC, which is accessible on the SEC.gov and our investor relations section of the AgEagle website. Additionally, we announced some key highlights from our 10-K via a press release this morning, which I'd like to recap here. Looking at the results for the full year 2021, total revenue increased 659%, climbing to $9.8 million compared to $1.3 million in the prior year period. This increase was the result of the three aforementioned acquisitions contributing meaningful revenues throughout the year. Breaking down the full revenue results was our Red Edge and Altum sensor sales that totaled approximately $6.8 million, our drone and custom manufacturing sales that totaled approximately $2.4 million, and our software as a service subscription sales that totaled approximately $500,000. Consolidated gross profit margin on total revenues was 44% compared to 45% from 2020. The decrease was primarily a result of an increase in cost of components and parts, mainly due to supply chain constraints in the marketplace today we face. Our net loss available to common stockholders for 2021 was approximately $30.1 million. or 43 cents loss per share compared to a net loss available to common stockholders of approximately 14 million or 35 cents loss per share for 2020. Our cash position as of December 31st, 2021 was 14.6 million compared to 23.9 million at the end of 2020. In addition, total stockholders' equity increased substantially to 76.5 million as of December 31st, 2021, compared to $26.4 million as of the end of 2020. The increase in cash was primarily as a result of our investing activities, increased investing activities related to the three aforementioned acquisitions. Lastly, I want to provide an update on our capital raising efforts. From May 26, 2021 through December 31, 2021, we raised approximately $30.9 million by utilizing our ATM with our co-agents, Stiefel and Raymond James. These efforts have provided us the resources to pursue our goal of building a full-stack solution that we believe will generate significant opportunities for growth across both commercial and government defense verticals, ultimately delivering increased substantial value to our shareholders. Now, I'll pass it back to Barrett to go over more detailed reviews, state of the industry, and our vision moving forward. Barrett?