AWARE INC /MA/ Leases Disclosure
9. LEASES
We lease 20,730 rentable square feet at 76 Blanchard Road in Burlington, Massachusetts (the “Leased Space”) which has a term of ten years and six months, which includes a one-time termination right after seven years and six months. The term of the lease commenced on October 1, 2022, the date that the landlord notified us that the planned construction on the Leased Space was substantially complete. The lease provides for an aggregate of $7.5 million of rent payments over the lease term and also provides a renewal option for up to two additional terms of five years each.
The components of lease expense included in the consolidated statements of operations and comprehensive loss are as follows (in thousands):
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For the Year Ended December 31, |
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2025 |
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2024 |
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Operating lease costs |
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$ |
733 |
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$ |
733 |
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Supplemental cash flow information related to the Company’s operating lease was as follows: cash paid for amounts included in the measurement of operating lease liabilities was $0.7 million for both the years ended December 31, 2025 and 2024. The Company did not obtain any right-of-use assets in exchange for lease liabilities during 2025 or 2024.
Supplemental balance sheet information related to the Company's operating lease was as follows (in thousands):
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As of December 31, |
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2025 |
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2024 |
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Operating lease right-of-use assets |
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$ |
3,642 |
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$ |
3,964 |
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Current portion, operating lease liabilities |
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676 |
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|
656 |
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Operating lease liabilities, long term |
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3,292 |
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|
|
3,588 |
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Total operating lease liabilities |
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$ |
3,968 |
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|
$ |
4,244 |
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Weighted average remaining lease term (years) |
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|
7.3 |
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|
8.3 |
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Weighted average incremental borrowing rate |
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10.1 |
% |
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|
10.1 |
% |
The discount rate implicit in the lease was not readily determinable, and as such, we engaged a third-party valuation specialist to calculate the incremental borrowing rate (“IBR”). The IBR was determined as of the lease commencement date and was dependent on several factors including the amount of lease payments, our credit rating based on a collateralized borrowing, the lease term and the currency of the lease.
Future minimum lease payments for operating leases with initial remaining terms in excess of one year as of December 31, 2025 are as follows:
2026 |
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$ |
708 |
|
2027 |
|
|
729 |
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2028 |
|
|
751 |
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2029 |
|
|
773 |
|
2030 |
|
|
797 |
|
Thereafter |
|
|
1,881 |
|
Total lease payments |
|
|
5,639 |
|
Less implied interest |
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|
(1,671 |
) |
Total operating lease liabilities |
|
$ |
3,968 |
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 6, 2026 | Showing above |
| 2024 | Mar 13, 2025 | |
| 2023 | Mar 15, 2024 | |
| 2022 | Mar 15, 2023 | |
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.