Ondas Inc. Leases Disclosure
NOTE 9 – LEASES
The Company has operating leases for office space, warehouses, and certain equipment, primarily automobiles. Many leases include one or more options to renew, some of which include options to extend the leases for up to 10 years. In certain of the Company’s lease agreements, the rental payments are adjusted periodically to reflect inflation and/or changes in other indexes.
Lease Costs
| Years ended December 31, |
||||||||
| (dollars in thousands) | 2025 | 2024 | ||||||
| Components of total lease costs: | ||||||||
| Operating lease expense | $ | 1,446 | $ | 1,017 | ||||
| Common area maintenance expense | 381 | 551 | ||||||
| Short-term lease costs (1) | 130 | 828 | ||||||
| Total lease costs | $ | 1,957 | $ | 2,396 | ||||
| (1) | Represents short-term leases with an initial term of 12 months or less, which are immaterial. |
Lease Positions as of December 31, 2025 and 2024
lease assets are recorded in Other assets, the current portion of lease liabilities for our operating leases are recorded in Accrued expenses and other liabilities, and the of our liabilities for our operating leases are recorded in on the Consolidated Balance Sheets as follows:
| December 31, | ||||||||
| (dollars in thousands) | 2025 | 2024 | ||||||
| Assets: | ||||||||
| Operating lease assets | $ | 10,365 | $ | 3,922 | ||||
| Total lease assets | $ | 10,365 | $ | 3,922 | ||||
| Liabilities: | ||||||||
| Operating lease liabilities, current | $ | 3,076 | $ | 1,122 | ||||
| Operating lease liabilities, net of current | 9,645 | 4,962 | ||||||
| Total lease liabilities | $ | 12,721 | $ | 6,084 | ||||
Other Leases Information
| Years ended December 31, | ||||||||
| (dollars in thousands) | 2025 | 2024 | ||||||
| Operating cash flows for operating leases | $ | 2,038 | $ | 1,047 | ||||
| Weighted average remaining lease term (in years) – operating lease | 5.61 | 4.50 | ||||||
| Weighted average discount rate – operating lease | 6.57 | % | 9.20 | % | ||||
Undiscounted Leases Cash Flows
Future lease payments included in the measurement of lease liabilities on the Consolidated Balance Sheets as of December 31, 2025, for the following five years and thereafter as follows (in thousands):
(dollars in thousands) Years ending December 31,(1) | ||||
| 2026 | $ | 3,732 | ||
| 2027 | 3,584 | |||
| 2028 | 3,502 | |||
| 2029 | 2,418 | |||
| 2030 | 630 | |||
| Thereafter | 2,321 | |||
| Total future minimum lease payments | $ | 16,187 | ||
| Lease imputed interest | (3,466 | ) | ||
| Total | $ | 12,721 | ||
| (1) | Remaining non-cancellable sublease proceeds for the years ending December 31, 2026 - 2028, and 2029 of $495 thousand and $144 thousand, respectively, are not included in the table above. |
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.