AEye, Inc. Leases Disclosure

5.

LEASES

 

The Company leases office facilities in Northern California under non-cancelable operating leases. In July 2024, the Company entered into two new long-term leases, one of which the Company uses as its headquarters, which was amended in February 2026 to extend the term and add additional square footage. 

 

Some of the Company's leases include options to renew, with renewal terms that, if exercised by the Company, extend the lease term for five years. The exercise of these renewal options is at the Company's discretion. The Company's lease agreements do not contain any material terms and conditions of residual value guarantees or material restrictive covenants. The Company's short-term lease expense was determined to not be material.

 

On November 14, 2023, the Company assigned an operating lease resulting in the Company being relieved of its primary obligation under this lease. As a result of the lease assignment, a new tenant assumed the primary obligation under the lease, with the Company becoming secondarily liable. If the new tenant should fail to perform under the lease, the Company could be liable to fulfill any remaining lease obligations. The lease had a remaining term of 1.7 years as of December 31, 2025 with the Company serving as guarantor for the remaining term. The resulting maximum exposure includes $166 of undiscounted future minimum lease payments plus potential additional payments to satisfy maintenance, taxes, and insurance requirements for the remainder of the lease term.

 

In August 2024, one of the Company's existing leases, originally set to expire on November 30, 2026, was terminated early. In conjunction with the early termination, the Company recorded a net gain of $491 on termination of the operating lease during the year ended December 31, 2024. The net gain included a gain of $5,954, comprised of a $16,325 net liability reduction, partially offset by a $10,371 decrease in its remaining right of use asset.  Additionally, in accordance with terms in the lease agreement and based on certain assumptions, the Company recorded a lease termination loss of $5,463, representing estimated unpaid rent for the remaining term. The net gain was recorded in general and administrative expenses in the consolidated statement of operations and comprehensive loss. The lease termination liability was reduced by the draw-down of the $2,150 letter of credit by the landlord in August 2024; the remaining lease termination liability of $3,313 as of December 31, 2024 was recorded in accrued expenses and other current liabilities in the consolidated balance sheet. 

 

On  April 28, 2025, the Company and the former landlord entered into a settlement agreement to resolve all outstanding disputes related to the early termination of the lease. Under the terms of the agreement, the Company paid $1,400 in cash and issued a warrant to purchase up to 350,000 shares of the Company's common stock at an exercise price of $2.22 per share, which had a fair value of $899 on the date of issuance. The Company recorded a net gain on termination of operating lease of $1,014 during the year ended  December 31, 2025. 

 

The components of operating lease expenses, excluding the gain on lease termination, for the years ended December 31, 2025 and 2024 were as follows (in thousands):

 

		Year ended December 31,
		2025				2024
Operating lease cost		$	289			$	1,498
Variable lease cost			16				204
Total operating lease cost		$	305			$	1,702

 

Supplemental cash flow information for the years ended December 31, 2025 and 2024 were as follows (in thousands):

 

		Year ended December 31,
		2025				2024
Cash paid for operating leases included in operating cash flows		$	306			$	1,497

 

Supplemental balance sheet information related to operating leases as of December 31, 2025 and 2024 was as follows (in thousands):

 

		As of December 31,
		2025				2024
Operating lease right-of-use assets		$	441			$	652
Operating lease liabilities:
Operating lease liabilities, current		$	275			$	267
Lease termination liability			—				3,313
Operating lease liabilities, non-current			235				479
Total operating lease liabilities		$	510			$	4,059

 

		As of December 31,
		2025				2024
Weighted average remaining lease term (in years)			1.89				2.89
Weighted average discount rate			6.40	%			6.40	%

 

Maturities of lease liabilities as of December 31, 2025, are as follows (in thousands).

 

Years ending - December 31:
2026		$	283
2027			257
Total lease payments			540
Less amount to discount to present value			(30	)
Present value of lease liabilities		$	510