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Leases | 12 Months Ended
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Dec. 31, 2023
Leases |
Leases | Note 12 – Leases Operating Leases The Company determines if an arrangement is or contains a lease at contract inception and recognizes a right-of-use asset and a lease liability at the lease commencement date. Leases with an initial term of twelve months or less, but greater than one month, are not recorded on the balance sheet for select asset classes. The lease liability is measured at the present value of future lease payments as of the lease commencement date, or the opening balance sheet date for leases existing at adoption of ASC 842. The right-of-use asset recognized is based on the lease liability adjusted for prepaid and deferred rent and unamortized lease incentives. Right-of-use assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease terms at the commencement dates. The Company uses its incremental borrowing rates as the discount rate for its leases, which is equal to the rate of interest the Company would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. The incremental borrowing rate for all existing leases as of the opening balance sheet date was based upon the remaining terms of the leases; the incremental borrowing rate for all new or amended leases is based upon the lease terms. The lease terms for all the Company’s leases include the contractually obligated period of the leases, plus any additional periods covered by options to extend the leases that the Company is reasonably certain to exercise. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. The components of a lease are split into three categories: lease components, non-lease components and non-components; however, the Company has elected to combine lease and non-lease components into a single component. Operating lease expense is recognized on a straight-line basis over the lease term and is included in general and administrative expense on the consolidated statement of operations. Variable lease payments are expensed as incurred. The Company has an operating lease in Wichita, Kansas, which serves as its corporate offices. The lease commencement date was November 1, 2023, and will expire on October 31, 2025, unless sooner terminated or extended. The estimated cash rent payments due through the expiration of this operating lease total $226,678. As a result of the MicaSense Acquisition, the Company assumed an operating lease for office space in Seattle, Washington that expires in January 2026 with a 3% per year increase, and two months of abated rent for December 2020 and January 2021. The estimated cash rent payments due through the expiration of this operating lease total approximately $467,767. Starting late 2022, the Company has been engaged in consolidating its business and manufacturing operations from multiple offices to two centralized locations in Wichita, Kansas and Lausanne, Switzerland. In May 2023, the Company executed a sublease agreement for their facility located in Seattle, Washington; however, the Company remains the primary obligor under the original lease. As a result of the senseFly Acquisition, the Company assumed the operating leases for office spaces in Raleigh, North Carolina and Lausanne, Switzerland. The operating lease in Raleigh expired in July 2023 and the operating lease in Lausanne was set to expire in April 2023. The Company was required to notify the landlord of its intention to not renew the lease in March 2022. The Company neglected to provide such notification, therefore, a five year renewal option was automatically triggered in March 2022. The Lausanne lease is now set to expire in April 2028. The estimated cash rent payments due through the expiration of this operating lease total approximately $3,370,025. AGEAGLE AERIAL SYSTEMS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 Note 12 – Leases – Continued As of December 31, 2023 and 2022, balance sheet information related to the Company’s operating leases is as follows: Schedule of Company's operating leases
|  | Balance Sheet Location |  | 2023 |  |  | 2022 |
|  |  |  | December 31, |
|  | Balance Sheet Location |  | 2023 |  |  | 2022 |
Right-of-use asset |  | Right-of-use asset |  | $ | 3,525,406 |  |  | $ | 3,952,317 |
Current portion of operating lease liability |  | Current portion of lease liabilities |  | $ | 901,925 |  |  | $ | 628,113 |
Long-term portion of operating lease liability |  | Long-term portion of lease liabilities |  | $ | 2,721,743 |  |  | $ | 3,161,703 |
For the years ended December 31, 2023 and 2022, operating lease expense payments were $1,039,685 and $1,287,143, respectively, and are included in general and administrative expenses in the consolidated statements of operations and comprehensive loss. As of December 31, 2023, scheduled future maturities of the Company’s lease liabilities are as follows: Schedule of Company's lease liabilities
Year Ending December 31, |  |  |
2024 |  | $ | 1,094,321 |
2025 |  |  | 1,100,394 |
2026 |  |  | 878,571 |
2027 |  |  | 792,947 |
2028 |  |  | 198,237 |
Total future minimum lease payments, undiscounted |  |  | 4,064,470 |
Less: Amount representing interest |  |  | (440,802 | )
Present value of future minimum lease payments |  |  | 3,623,668 |
Present value of future minimum lease payments – current |  |  | 901,925 |
Present value of future minimum lease payments – long-term |  | $ | 2,721,743 |
As of December 31, 2023 and 2022, the weighted average lease-term and discount rate of the Company’s leases are as follows: Schedule of weighted average lease-term and discount rate leases
|  | Years Ended December 31, |
Other Information |  | 2023 |  |  | 2022 |
Weighted-average remaining lease terms (in years) |  |  | 3.9 |  |  |  | 4.8 |
Weighted-average discount rate |  |  | 6.1 | % |  |  | 6.0 | %
For the years ended December 31, 2023 and 2022, supplemental cash flow information related to leases is as follows: Schedule Of Cash Flow Supplemental Information
Other Information |  | 2023 |  |  | 2022 |
|  | Years Ended December 31, |
Other Information |  | 2023 |  |  | 2022 |
Cash paid for amounts included in the measurement of liabilities: Operating cash flows for operating leases |  | $ | 1,054,847 |  |  | $ | 1,614,468 |
AGEAGLE AERIAL SYSTEMS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

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