Note 17  Leases

  

Leases primarily consist of office space and facilities with related parties or equipment with third parties. A lease is deemed to exist when the Company has the right to control the use of identified property, plant or equipment, as conveyed through a contract, for a certain period of time and consideration is paid. The right to control is deemed to occur when the Company has the right to obtain substantially all of the economic benefits of the identified assets and the right to direct the use of such assets. Right-of-use (“ROU”) assets and a corresponding lease liability are recognized on the lease commencement date (the date in which the asset is available for use). Lease liabilities are recognized in Other current payables and Other non-current payables.

 

The Company uses its estimated incremental borrowing rate in determining the present values of lease payments. The incremental borrowing rate is the rate of interest the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments for a term similar to the lease term in a similar economic environment as the lease. Lease liabilities are measured at the present value of lease payments to be made during the lease term, which is measured based on the contract term and renewal options. Options to extend or terminate the lease term are considered when it is reasonably certain the options will be exercised.

 

The following is a summary of balance sheet components of leases as of December 31:

 

Supplemental balance sheet information

 

2025

 

 

2024

Operating lease ROU assets - related parties

$

237

 

$

359

Operating lease ROU assets - third parties

 

73

 

 

737

Total operating lease ROU assets

$

310

 

$

1,096

 

 

 

 

 

 

Operating lease liabilities - related parties

$

221

 

$

312

Operating lease liabilities - third parties

 

73

 

 

735

Total operating lease liabilities

$

294

 

$

1,047

 

The following is a summary of the total operating lease cost recognized for the years ended December 31:

 

 

 

2025

 

 

2024

 

 

2023

Operating lease cost

$

198

 

$

588

 

$

113

 

The following presents supplemental information for the Company’s leases. For the years ended December 31, 2024 and 2023, leases with third parties were insignificant and are not included in the data below for those years. 

 

 

 

2025

 

 

2024

 

 

2023

 

Supplemental information

 

 

 

 

 

 

 

 

 

Cash paid for amounts included in the measurement of lease liabilities

 

 

 

 

 

 

 

 

 

Operating cash flows for operating leases - related parties

$

172

 

$

141

 

$

113

 

Operating cash flows for operating leases - third parties

$

26

 

$

447

 

$

 n.m.

 

Right-of-use assets obtained in exchange for lease obligations

 

 

 

 

 

 

 

 

 

Operating leases - related parties

$

1

 

$

-

 

$

334

 

Operating leases - third parties

$

23

 

$

1,108

 

$

 n.m.

 

 

 

 

 

 

 

 

 

 

 

Weighted-average remaining lease term (Years) - related parties

 

3.2

 

 

2.6

 

 

3.6

 

Weighted-average remaining lease term (Years) - third parties

 

2.7

 

 

1.4

 

 

 n.m.

 

Weighted-average discount rate - related parties

 

16.9

%

 

9.9

%

 

10.2

%

Weighted-average discount rate - third parties

 

5.1

%

 

3.8

%

 

 n.m.

 

 

n.m. = not meaningful 

 

Future minimum lease payments at December 31, 2025 were as follows:

 

 

Operating Leases

2026

$

208

2027

 

117

2028

 

19

2029

 

5

2030

 

-

Thereafter

 

-

Total minimum lease payments

 

349

Imputed interest

 

(55)

Total operating lease liabilities - related parties

$

294

 

As of December 31, 2025, the Company has two lease agreements with Embraer that have not yet commenced. One agreement is for a facility in Gavião Peixoto, São Paulo, Brazil. The lease is expected to commence in 2026. The other lease agreement is for a property in Taubaté, São Paulo, Brazil, which was executed on August 13, 2024. This property is expected to be used to develop the Company’s manufacturing facility for eVTOL production. The lease agreement included a commitment by the Company to invest a minimum of R$15.0 million (or approximately $2.7 million using the exchange rate as of December 31, 2025) in leasehold improvements. As of December 31, 2025, the Company incurred approximately $4.4 million in prepaid lease costs, which is recognized in the “Other non-current assets” line of the consolidated balance sheets.

Historical Timeline

Fiscal YearFiled
2025Mar 16, 2026Showing above
2024Mar 11, 2025
2023Mar 8, 2024

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.