LEASE REVENUES |
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Jun. 30, 2025 | ||||||||||||||||||||||||||||||||||||
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| LEASE REVENUES | NOTE 10 – LEASE REVENUES
The Company leases the LungFit® PH device to customers and receives a fixed rental fee over the term of the arrangement. Contract terms (generally one-to-three years) vary by customer and may include options to terminate the contract or options to extend the contract. The LungFit® PH lease agreements are accounted for as operating leases. The non-lease components, including consumables and device-related services are combined with the predominant lease component under the practical expedient. The fixed rental fee is recognized over the period of the lease agreement on a straight-line basis.
The Company recognized $1.3 million and $0.6 million in LungFit® PH lease revenues for the three months ended June 30, 2025 and June 30, 2024, respectively, included revenues in the accompanying unaudited condensed consolidated statements of operations. The Company received approximately $1.2 million and $0.4 million in cash associated with leases which the Company is the lessor for the three months ended June 30, 2025 and June 30, 2024, respectively. The Company has recorded less than $0.1 million and $0.1 million in deferred revenue associated with leased devices as of June 30, 2025 and June 30, 2024, respectively.
The following schedule presents the minimum future lease payments under the LungFit® PH lease arrangements that were in place as of June 30, 2025 (in thousands):
The LungFit® PH devices are included in Property and Equipment (Note 3) and have a useful life of five years. Depreciation expense related to leased LungFit® PH devices was $0.6 million and $0.5 million for the three months ended June 30, 2025 and June 30, 2024, respectively.
The depreciation expense related to customer leased devices is included in the cost of revenue in the unaudited condensed consolidated statements of operations and comprehensive loss.
Capitalized sales commissions
Sales commissions related to obtaining LungFit® PH lease agreements are accounted for as initial direct costs and are capitalized and amortized on a straight-line basis over the lease term. Total capitalized costs for the three months ended June 30, 2025 and June 30, 2024 were immaterial.
BEYOND AIR, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
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