AIRGAIN INC Leases Disclosure
Note 9. Leases
Operating Leases
The Company has made certain assumptions and judgments when applying ASC 842, the Company elected not to recognize right-of-use assets and lease liabilities for short-term leases (lease terms of twelve months or less).
Operating lease arrangements primarily consist of vehicle, office, warehouse and test house leases expiring during different years through . The facility leases have original lease terms of approximately to seven years and may contain options to extend up to 5 years and/or terminate early. Options to extend are included in leased right-of-use assets and lease liabilities in the consolidated balance sheet when we are reasonably certain to renew a lease. Since the implicit rate of such leases is unknown and we may not be reasonably certain to renew leases, the Company has elected to apply a collateralized incremental borrowing rate to facility leases on the original lease term in calculating the present value of future lease payments. As of December 31, 2025 and 2024, the weighted average discount rate for operating leases was 6.8% and 6.5%, respectively, and the weighted average remaining lease term for operating leases was 5.2 years and 6.3 years, respectively.
The Company has entered into various short-term operating leases, primarily for test houses and office equipment with initial terms of 12 months or less. These short-term leases are not recorded on the Company's consolidated balance sheet and the related short-term lease expense was $0.2 million for each of the year ended December 31, 2025 and 2024. Total operating lease cost were $1.1 million $0.8 million for year ended December 31, 2025 and 2024, respectively.
Capital area maintenance, property taxes and non-lease costs are excluded from lease expense.
The table below presents aggregate future minimum payments due under leases, reconciled to lease liabilities included in the consolidated balance sheet as of December 31, 2025 (in thousands):
|
|
|
|
|
Future operating lease obligations: |
|
|
|
|
2026 |
|
$ |
1,112 |
|
2027 |
|
|
1,093 |
|
2028 |
|
|
957 |
|
2029 |
|
|
921 |
|
2030 |
|
|
872 |
|
Thereafter |
|
|
663 |
|
Total minimum payments |
|
$ |
5,618 |
|
Less imputed interest |
|
|
(917 |
) |
Less unrealized translation gain |
|
|
— |
|
Total lease liabilities |
|
$ |
4,701 |
|
Less short-term lease liabilities |
|
|
(821 |
) |
Long-term lease liability |
|
$ |
3,880 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Mar 6, 2024 | |
| 2022 | Mar 20, 2023 | |
| 2021 | Mar 21, 2022 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.