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Retirement Plans
 12 Months Ended
Dec. 31, 2024
Retirement Plans  
Retirement Plans

Note 10 – Retirement Plans

 

Defined Benefit Plan

 

senseFly S.A. sponsors a defined benefit pension plan (the “Defined Benefit Plan”) covering all its employees. The Defined Benefit Plan provides benefits in the event of retirement, death or disability, with benefits based on age and salary. The Defined Benefit Plan is funded through contributions paid by senseFly S.A. and its employees, respectively. The Defined Benefit Plan assets are Groupe Mutuel Prévoyance (“GMP”), which invests these plan assets in cash and cash equivalents, equities, bonds, real estate and alternative investments.

 

The Projected Benefit Obligation (“PBO”) includes in full the accrued liability for the plan death and disability benefits, irrespective of the extent to which these benefits may be reinsured with an insurer. The actuarial valuations are based on the census data as of December 31, 2024, provided by GMP.

 

The Company recognizes the overfunded or underfunded status of the Defined Benefit Plan as an asset or liability in its consolidated balance sheets and recognizes changes in the funded status of the Defined Benefit Plan in the year in which the changes occur through accumulated other comprehensive income or loss. The Defined Benefit Plan’s assets and benefit obligations are remeasured as of December 31 each year.

 

The net periodic benefit cost of the Defined Benefit Plan for the period from January 1, 2024 through December 31, 2024 was as follows:

 

   2024 
Service cost  $201,383 
Interest cost   38,252 
Expected return on plan assets   (95,629)
Amortization of prior service cost (credit)   (2,250)
Loss recognized due to settlements and curtailments   68,628 
Net periodic pension benefit cost  $210,384 

 

The PBO is the present value of benefits earned to date by plan participants, including the effect of assumed future salary increases. The changes in the projected benefit obligation for the period from January 1, 2024 through December 31, 2024 were as follows:

 

   2024 
PBO, beginning of period  $2,877,851 
Service cost   201,383 
Interest cost   38,252 
Plan participation contributions   154,131 
Actuarial (gains) / losses   (27,001)
Benefits paid through plan assets   14,626 
Curtailments, settlements and special contractual termination benefits   (1,175,674)
Foreign currency exchange rate changes   (169,230)
PBO, end of period   1,914,338 
Component representing future salary increases   (88,911)
Accumulated benefit obligation (“ABO”), end of period  $1,825,427 

 

For the period from January 1, 2024 through December 31, 2024, the change in fair value of the Pension Plan assets was as follows:

 

   2024 
Fair value of plan assets, beginning of period  $2,661,718 
Expected return on plan assets   95,629 
Gain / (losses) on plan assets   (38,252)
Employer contributions   230,635 
Plan participant contributions   154,131 
Benefits paid through plan assets   14,626 
Settlements   (1,175,674)
Foreign currency exchange rate changes   (156,902)
Fair value of plan assets, end of period  $1,785,911 

 

 

AGEAGLE AERIAL SYSTEMS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

 

Note 10 – Retirement Plans- Continued

 

senseFly S.A.’s investment objectives are to ensure that the assets of its Defined Benefit Plan are invested to provide an optimal rate of investment return on the total investment portfolio, consistent with the assumption of a reasonable risk level, and to ensure that pension funds are available to meet the plans’ benefit obligations as they become due. senseFly S.A. believes that a well-diversified investment portfolio will result in the highest attainable investment return with an acceptable level of overall risk. Investment strategies and allocation decisions are also governed by applicable governmental regulatory agencies. senseFly’s investment strategy with respect to the Defined Benefit Plan is to invest in accordance with the following allocation: 32.6% in equities, 36.3% in bonds, 17.3% in real estate, 9.4% in alternative investments and 4.4% in cash and cash equivalents.

 

The following table presents the fair value of the Defined Benefit Plan assets by major categories and by levels within the fair value hierarchy as of December 31, 2024:

 

   Level 1   Level 2   Level 3   Total 
Cash and equivalents  $79,032   $-   $-   $79,032 
Equity securities   581,766    -    -    581,766 
Bonds   647,626    -    -    647,626 
Real estate   -    309,543    -    309,543 
Alternative investments   -    167,944    -    167,944 
Total fair value of plan assets  $1,308,424   $477,487   $-   $1,785,911 

 

The following tables present the fair value of the Defined Benefit Plan assets by major categories and by levels within the fair value hierarchy as of December 31, 2023: 

 

   Level 1   Level 2   Level 3   Total 
Cash and equivalents  $117,463   $-   $-   $117,463 
Equity securities   846,910    -    -    846,910 
Bonds   942,056    -    -    942,056 
Real estate   -    454,853    -    454,583 
Alternative investments   -    300,706    -    300,706 
Total fair value of plan assets  $1,906,429   $755,289   $-   $2,661,718 

 

The following table shows the unfunded status of the Defined Benefit Plan, defined as plan assets less the projected benefit obligation as of December 31, 2024:

 

 Schedule of Unfunded Status of the Defined Benefit Plan

Fair value of plan assets  $1,785,911 
Less: PBO   (1,914,338)
Underfunded status, end of period  $(128,427)

 

 

AGEAGLE AERIAL SYSTEMS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

 

Note 10 – Retirement Plans- Continued

 

As of December 31, 2024 and 2023, the underfunded status is included in defined plan obligation on the consolidated balance sheets.

 

The Defined Benefit Plan has a PBO in excess of Defined Benefit Plan assets. For the period from January 1, 2024 through December 31, 2024, the amounts recognized in accumulated other comprehensive income (loss) related to the defined benefit plan were as follows:

 

   2024 
Net prior service (cost) / credit  $- 
Net gain / (loss)   (128,427)
Accumulated other comprehensive income (loss), net of tax  $(128,427)

 

The net prior service credit included in accumulated other comprehensive income (loss) as of December 31, 2024, is expected to be recognized as a component of net periodic benefit cost during the year ending December 31, 2025.

 

The actuarial assumptions for the Defined Benefit Plan were as follows:

 

Benefit obligations:    
Discount rate   1.50%
Estimated rate of compensation increase   1.25%
Periodic costs:     
Discount rate   1.50%
Estimated rate of compensation increase   1.25%
Expected long term rate of return on plan assets   3.79%
Cash balance interest credit rate   1.50%

 

The following table shows expected benefit payments from the Defined Benefit Plan for the next five fiscal years and the aggregate five years thereafter:

 

Year Ending December 31: 

Expected Plan

Benefit Payments

 
2025  $336,985 
2026   286,492 
2027   243,683 
2028   210,753 
2029   185,506 
Thereafter   803,495 
Total expected benefit payments by the plan  $2,066,914 

 

Defined Contribution Plan

 

The Company sponsors the AgEagle Aerial Systems 401(k) Plan (the “401(k) Plan”) that covers substantially all eligible employees in the United States. The Company matches contributions made by eligible employees, subject to certain percentage limits of the employees’ earnings. For the years ended December 31, 2024 and 2023, the Company’s employer contribution to the 401(k) Plan totaled $97,845 and $77,240, respectively.

 

 

AGEAGLE AERIAL SYSTEMS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023