Company: LIDRW
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0001437749-25-004906
Chunk: 959

Company: AEye, Inc.
Filing Date: 2025-02-24
Form: 10-K
Item: Item 6
Chunk 959
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 after  January 1, 2022, pursuant to the Tax Cuts and Jobs Act of 2017, companies are required to capitalize Internal Revenue Code ("IRC") Section 174 research and experimental expenses paid or incurred during the year. These expenses are amortized over 5 years for research and development performed in the United States and over 15 years for expenses related to research and development performed outside of the United States. As a result of the IRC Section 174 research and development capitalization, the Company recognized a deferred tax asset for the future tax benefit of the amortization deductions.

    21.  COMMITMENTS AND CONTINGENCIES 

   Legal Matter
    
   The Company  may be subject to legal proceedings and claims that arise in the ordinary course of business. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict and the Company’s view of these matters  may change in the future as the litigation and events related thereto unfold. The Company expenses legal fees as incurred. The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.
    
   On  August 28, 2024, the Company was served with a complaint that was filed in the Superior Court of California for the County of Alameda on  August 26, 2024 that (1) alleges the Company is in breach of the lease for its former headquarters office in Dublin, California because of the Company’s failure to pay rent as required by the lease and (2) provides notice that the lease had been terminated by the landlord effective as of  August 23, 2024.  The landlord claimed that the amount owed could be up to $8,500. Thereafter, in  August 2024, the landlord fully drew down the standby letter of credit of $2,150, which was held as security for the payment of rent, due to the alleged default of the lease. The Company disputes, among other things, that the total damages claimed by the landlord equal the amount claimed. Depending on the outcome of this matter, there could be a material adverse effect on the financial position, results of operations, or cash flows of the Company. An initial trial date has been set for  April 2026.

       22. 
       RELATED PARTIES 

   From  November 2016 to