Company: AAOI
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001437749-25-015518
Chunk: 90

Company: APPLIED OPTOELECTRONICS, INC.
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 8
Chunk 90
---
 meters of two adjoining parcels of land, in New Taipei City. The lease also includes a building on these parcels, totaling approximately 3,406 square meters. The lease term is for fifteen years, commencing on  December 1, 2024, and ending on  November 30, 2039. A two-month renovation period from  October 1 to  November 30, 2024,  preceded the lease term, during which no rent was be charged by the Lessor. During the lease term, the monthly rent will increase by three percent (3%) every three years. 
    
   As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Based on the applicable lease terms and current economic environment, the Company applies a location approach for determining the incremental borrowing rate.
    
   Lease expense is included under general and administrative expenses and was $0.6 million, and $0.2 million for the three months ended  March 31, 2025 and 2024, respectively. The components of lease expense were as follows for the periods indicated (in thousands):

       Three months ended March 31,  
 ​   2025    2024  
 Operating lease expense  $434  $238 
 Short Term lease expense   140   11 
 Total lease expense  $574  $249 

   Maturities of lease liabilities are as follows for the future one-year periods ending  March 31, 2025 (in thousands):
   ​
   
     Fiscal years:   Operating  
 2025 (remaining 9 months)  $1,261 
 2026   1,485 
 2027   1,477 
 2028   1,493 
 2029   911 
 2030 and thereafter   5,066 
 Total lease payments   11,693 
 Less imputed interest   (1,736)
 Present value  $9,957 

   ​
   The weighted average remaining lease term and discount rate for the leases were as follows for the periods indicated:
   ​
   
       Three months ended March 31,