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Leases

9 Months Ended

Sep. 30, 2024

Leases primarily consist of office space, facilities, and equipment. A lease is deemed to exist when the Company has the right to control the use of identified property, plant or equipment, as conveyed through a contract, for a certain period of time and consideration paid. The right to control is deemed to occur when the Company has the right to obtain substantially all of the economic benefits of the identified assets and the right to direct the use of such assets. The Company recognizes right-of-use (“ROU”) assets and a corresponding lease liability on the lease commencement date (the date in which the asset is available for use). Lease liabilities are recognized in “Other current payables” and “Other non-current payables.”

The Company uses its estimated incremental borrowing rate in determining the present values of lease payments. The incremental borrowing rate is the rate of interest the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments for a term similar to the lease term in a similar economic environment as the lease. Lease liabilities are measured at the present value of lease payments to be made during the lease term, which is measured based on the contract term and renewal options. Options to extend the lease term or terminate it early are considered when it is reasonably certain the options will be exercised.

The following is a summary of the balance sheet components of leases:

	September 30,		December 31,
		2024		2023
Supplemental balance sheet information
ROU assets, net - related parties	$	385	$	474
ROU assets, net - third parties		875		34
Total ROU assets, net	$	1,260	$	508

Operating lease liabilities - related parties	$	360	$	474
Operating lease liabilities - third parties		872		36
Total operating lease liabilities	$	1,232	$	510

Future minimum lease payments at September 30, 2024 were as follows:

		Operating Leases
2024	$	162
2025		743
2026		314
2027		96
2028		4
Thereafter		-
Total minimum lease payments		1,319
Imputed interest		(87	)
Total operating lease liabilities	$	1,232

As of September 30, 2024, the Company has two lease agreements with Embraer that have not yet commenced. One agreement is for a facility in Gavião Peixoto, São Paulo, Brazil. The lease is expected to commence in 2025. The other lease agreement was executed on August 13, 2024, where the Company agreed to lease property from Embraer in Taubaté, São Paulo, Brazil. This site is expected to be used to develop the Company’s manufacturing facility for eVTOL production. The lease agreement included a commitment by the Company to invest a minimum of R$15 million in leasehold improvements. As of September 30, 2024, the Company incurred approximately $0.4 million in prepaid lease costs, which is recognized in the “Other non-current assets” line of the condensed consolidated balance sheets.