Item 1.01 Entry into a Material Definitive Agreement.

On August 4, 2020, AgEagle Aerial Systems Inc. (the "Company"), and an institutional investor and existing Company shareholder (the "Investor") entered into a securities purchase agreement (the "Purchase Agreement") pursuant to which the Company agreed to sell to the Investor in a registered direct offering 3,355,705 shares of common stock, par value $0.001 ("Common Stock"), and warrants to purchase up to 2,516,778 shares of Common Stock at an exercise price of $3.30 per share (the "Warrants"), for gross proceeds of approximately $10 million. Upon exercise of the Warrants in full by the Investor, the Company would receive additional gross proceeds of approximately $8,305,367. The shares of Common Stock underlying the Warrants are referred to as "Warrant Shares."

The purchase price for each share of Common Stock is $2.98. Net proceeds from the sale will be used for working capital, capital expenditures and general corporate purposes. The Shares, the Warrants and the Warrant Shares are being offered by the Company pursuant to an effective shelf registration statement on Form S-3 (File No. 333-239157), which was declared effective on June 19, 2020.

Pursuant to the terms of the Purchase Agreement, the Company has agreed to certain restrictions on future stock offerings, including that during the 75-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, including if the consolidated closing price on the trading market on which the Company's Common Stock is traded at the time is greater than $5.00 (adjusted for any subsequent stock splits or similar capital adjustments) for ten consecutive trading days, the Company may issue such securities at not less than $5.00 per Common Stock Equivalent. In addition, the Company's executive officers and directors agreed that they shall not sell (or hedge in any manner) any of their shares of the Common Stock for a period ending September 7, 2020. The Investor has a right from the date of the Purchase Agreement until December 31, 2020, to participate in a subsequent financing by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents for cash consideration, indebtedness or a combination of units thereof (a "Subsequent Financing"), in an amount equal to 50% of the Subsequent Financing on the same terms, conditions and price provided for in the Subsequent Financing.

The exercise price of the Warrants and the number of Warrant Shares 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 only in the event there is no effective registration statement registering, or the prospectus contained therein is not available for the sale of the shares underlying the Warrants. The Warrants contain a beneficial ownership limitation, such that none of such Warrants may be exercised, if, at the time of such exercise, the holder would become the beneficial owner of more than 9.99% of our outstanding shares of Common Stock following the exercise of such Warrant. The Warrant is for a ten month term and is not exercisable for the first six months.

A copy of the form of the Purchase Agreement and the form of Warrant are attached hereto as Exhibits 10.1 and 4.1, respectively, and are incorporated herein by reference. The foregoing summaries of the terms of the Purchase Agreement and the Warrants are subject to, and qualified in their entirety by, such documents.

On August 5, 2020, the Company issued a press release announcing the transaction. A copy of such press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits



Exhibit No.    Description
4.1              Form of Stock Purchase Warrant (incorporated by reference to the
               Current Report on Form 8-K filed on August 6, 2020)
5.1              Legal Opinion of Loeb & Loeb LLP (incorporated by reference to
               the Current Report on Form 8-K filed on August 6, 2020)
10.1             Form of Securities Purchase Agreement between the Registrant and
               the Investor (incorporated by reference to the Current Report on
               Form 8-K filed on August 6, 2020)
99.1             Press Release dated August 5, 2020 (incorporated by reference to
               the Current Report on Form 8-K filed on August 6, 2020)






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