Aptera Motors Corp Leases Disclosure
NOTE 6 – LEASES
As of December 31, 2025, we leased approximately 77,000 square feet of office, manufacturing and assembly space at our principal facility in Carlsbad, California. We record leases at lease commencement, which is the date when the underlying asset is made available for use by the lessor.
The lease commenced on February 1, 2022, and has a term of 62 months, expiring on April 1, 2027.
The lease agreement includes scheduled rent escalations over the lease term, with monthly base rent ranging from $91,000 to $106,000. The lease also included rent abatement for the second and thirteenth months of the lease. Lease expense is recognized on a straight-line basis over the lease term.
A security deposit of $2.5 million was paid in connection with the lease, $1.5 million of which has been returned to the Company as of December 31, 2025. The lease is a triple net lease, meaning the Company is responsible for all costs, expenses, and obligations relating to the facility, including operating expenses, repairs, insurance, and taxes.
In March 2026, the Company amended the terms of this lease to extend the lease expiration date through March 31, 2028, with monthly base rent of approximately $106,000 (See Note 10 — Subsequent Events).
Our lease agreement does not provide an implied borrowing rate and we have, therefore, used a benchmark approach to derive an appropriate incremental borrowing rate. We used companies of similar credit ratings and comparable credit quality to derive a benchmark incremental borrowing rate to discount lease liabilities through the remaining lease term.
Operating lease obligations are presented as follows on the condensed consolidated balance sheets (in thousands):
| As of December 31, | ||||||||
| 2025 | 2024 | |||||||
| Operating lease assets, net | $ | 1,226 | $ | 2,104 | ||||
| Current portion of lease liabilities | 1,156 | 1,030 | ||||||
| Long-term lease liabilities | 311 | 1,468 | ||||||
| $ | 1,467 | $ | 2,498 | |||||
The following table summarizes the annual contractual maturities of operating lease liabilities (in thousands):
| As of December 31, 2025 | ||||
| 2026 | $ | 1,227 | ||
| 2027 | 314 | |||
| Total minimum lease payments | 1,541 | |||
| Imputed interest | (74 | ) | ||
| Total minimum lease payments | $ | 1,467 | ||
We recorded $1.0 million as operating lease expense for the years ended December 31, 2025 and 2024, respectively. This expense is allocated to “General, selling, and administrative” and “Research and development” expenses in the condensed consolidated statements of operations.
Other information related to our lease obligations is as follows:
| As of December 31, | ||||||||
| 2025 | 2024 | |||||||
| Supplemental lease information: | ||||||||
| Weighted average remaining lease term (in years) | 1.25 | 2.25 | ||||||
| Weighted average discount rate | 8.30 | % | 8.30 | % | ||||
| As of December 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash payments included in the measurement of lease liabilities: | ||||||||
| Operating cash flows from operating leases | $ | 1,191 | $ | 1,139 | ||||
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.