v3.26.1
Note 17 - Subsequent Events
12 Months Ended
Dec. 31, 2025
Notes to Financial Statements  
Subsequent Events [Text Block]

Note 17 Subsequent Events

 

               On  January 1, 2026, a lease commenced for a 33,144 square foot space located in Dallas, Texas. The lease term ends January 31, 2031 with one optional extension of sixty months.  Monthly rental payments required over the lease term range from $36,597 - $42,813 with annual increases of 3.75% commencing on February 1 of each year. The first month of rent was abated and a $165,720 tenant improvement allowance was provided by the landlord. The lease required a security deposit of $162,000 and a standby letter of credit of $165,720.  

 

On January 2, 2026 Alpha exercised its right under the Securities Purchase Agreement to purchase an additional 500 shares of Series F convertible into 586,441 shares of common stock, in the aggregate, at a conversion price of $0.8526 and warrants to purchase up to 586,441 shares of common stock at an exercise price of $0.8526 per share for an aggregate purchase price of $500,000.

 

           On January 22, 2026, a special meeting of stockholders was held and the stockholders approved an increase to the number of shares that may be issued under our 2017 Omnibus Equity Incentive Plan from 300,000 to 2,300,000, which was previously approved by the Board on November 24, 2025 and subject to approval by our stockholders.

 

        On January 22, 2026, a special meeting of stockholders was held and the stockholders approved the AgEagle Aerial Systems Inc. Employee Stock Purchase Plan (the "ESPP").  The purpose of the ESPP is to attract the services of new employees, to retain the services of existing employees, and to provide incentives for such individuals to exert maximum efforts toward our success by purchasing shares of common stock on favorable terms. The ESPP would be open to a broad base of full-time employees and would help further align their financial interests with those of existing stockholders. The following is a summary of the relevant terms of the ESPP. 

 

Shares Available for Issuance

 

The maximum aggregate share reserve under the ESPP available for purchase shall be equal to 500,000 shares of common stock. The maximum aggregate number of shares available for purchase under the ESPP will be subject to certain adjustments in the event that any dividend or other distribution (whether in the form of cash, common stock, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of common stock or other securities of the Company, or other change in the Company’s structure affecting the common stock, occurs. Any increase in the aggregate number of shares of stock to be issued under the ESPP is subject to the approval of the Company’s stockholders.

 

Administration

 

The ESPP will be administered by the Committee (as defined in the ESPP). The Committee has the authority to construe and interpret the ESPP, prescribe, amend and rescind rules relating to the ESPP’s administration and take any other actions necessary or desirable for the administration of the ESPP including, without limitation, adopting sub-plans applicable to particular subsidiaries or locations, which sub-plans may be designed to be outside the scope of Section 423 of the Code. The Committee may correct any defect or supply any omission or reconcile any inconsistency or ambiguity in the ESPP, and decisions of the Committee will be final and binding on all persons.

 

Eligibility

 

Employees who (i) have been employed by the Company or a subsidiary for at least 2 years and (ii) are customarily employed for at least 20 hours per week are eligible to participate in the ESPP. However, we are allowed to exclude “highly compensated employees” of the Company (within the meaning of Section 414(q) of the Code) or a sub-set of such highly compensation employees. We expect to exclude our executive officers from participating in the ESPP. Excluding executive officers, there were approximately 52 employees who would be eligible to participate in the ESPP as of November 24, 2025.

 

Each eligible employee will be able to authorize payroll deductions from his or her paycheck in an amount equal to at least 1%, but not more than 10% of his or her compensation on each pay day occurring during an Offering Period (as defined below) (or such other maximum percentage as the Committee may establish from time to time before an Offering Period begins). At the beginning of each Offering Period, each participating employee will be granted an option to purchase a number of shares of common stock determined by dividing such employee’s accumulated payroll deductions by the applicable purchase price. Notwithstanding the foregoing, no eligible employee will be granted such an option if (i) immediately after the grant of the option, such employee (or any other person whose stock would be attributed to such employee pursuant to Section 424(d) of the Code) would own capital stock of the Company or hold outstanding options to purchase stock possessing 5% or more of the total combined voting power or value of all classes of stock of the Company or any subsidiary or (ii) such option would permit his or her rights to purchase stock under all employee stock purchase plans (described in Section 423 of the Code) of the Company and its subsidiaries to accrue at a rate that exceeds $10,000 of the fair market value of such stock (determined at the time the option is granted) in any calendar year. In addition, no employee will be permitted to purchase more than 2,500 shares of common stock during an Offering Period (subject to adjustment in accordance with the terms of the ESPP).

 

Offering Periods and Purchase Price

 

The ESPP will be implemented by a series of Offering Periods, each of which will be 6 months in duration, with new periods commencing on or about January 1st and July 1st of each year (or such other times as determined by the Committee) (each, an “Offering Period”). The Committee may also specify Offering Periods with a duration of not more than 27 months and may specify shorter purchase periods within each offering. During each period, payroll deductions will accumulate, without interest. If any Offering Period is terminated before its scheduled expiration, all amounts that have not been used to purchase shares of common stock will be returned to the applicable employees (without interest, except as otherwise required by law).

 

On the last day of each period, accumulated payroll deductions will be used to purchase shares of the Company’s common stock for participating employees. For purposes of the ESPP, the purchase price will be equal to the lesser of (i) 90% (or such greater percentage as designated by the Committee) of the fair market value of a share of common stock on the first trading day of the applicable Offering Period or (ii) 90% (or such greater percentage as designated by the Committee) of the fair market value of a share of common stock on the date such a share is purchased. The fair market value of the Company’s common stock for this purpose will generally be the closing price on The New York Stock Exchange as reported by the Wall Street Journal for the date in question, or if such date is not a trading day, for the last trading day before the date in question.

 

The ESPP will automatically terminate on the 10-year anniversary of its effective date. In addition, the Committee may, in its sole discretion, suspend or terminate the ESPP at any time and for any reason. Any amendment is subject to the approval of the Company’s stockholders only to the extent required under applicable law or regulation, including Section 423 of the Code.

 

On March 4, 2026, AgEagle Aerial Systems Inc.  entered into a private placement subscription (the “Agreement”) with Aerodrome Group Ltd. (“Aerodrome”). Pursuant to the Agreement, the Company purchased 11,523,750 ordinary shares of Aerodrome at a price of 0.80 NIS per share for an aggregate of 9,219,000 NIS or $3,000,000 USD. 

 

On March 4, 2026 an investor exercised its right under the Securities Purchase Agreement to purchase an additional 250 shares of Series G convertible into 250,000 shares of common stock, in the aggregate, at a conversion price of $1.00 per share for an aggregate purchase price of $250,000. Immediately after the purchase they exercised their right to convert 250 preferred shares into 250,000 common stock. 

 

On March 5, 2026 Alpha exercised its right under the Securities Purchase Agreement to purchase an additional 2,000 shares of Series G convertible into 2,000,000 shares of common stock, in the aggregate, at a conversion price of $1.00 per share for an aggregate purchase price of $2,000,000. Immediately after purchase they exercised their right to convert 1,000 preferred shares into 1,000,000 common stock. 

 

As of March 31, 2026, Alpha has converted 2,759 shares of Preferred Stock Series F into 3,235,983 shares of Common Stock. In addition, Alpha exercised 1,128,050 warrants of Series F into 1,128,050 shares of common stock at an exercise price of $0.8526 for an aggregate amount of $961,775. Also, Alpha exercise 358,806 Seirs F warrants into 358,806 shares of common stock, on a cashless basis.

 

As of March 31, 2026, Alpha and other investors converted 7,940 shares of Preferred Stock Series G into 9,010,144 shares of Common Stock at an exercise price of between $0.8526 and $1.00.