NOTE 7 - Property and Equipment, Net

As of December 31, 2025 and 2024, the balances of property and equipment were as follows:

On July 10, 2018, the Company and Aerkomm Taiwan entered into a real estate sale contract (the “Land Purchase Contract”) with Tsai Ming-Yin (the “Seller”) with respect to the acquisition by Aerkomm Taiwan of a parcel of land located in Taiwan. The land is expected to be used to build a satellite ground station and data center. Pursuant to the terms of the Land Purchase Contract, and subsequent amendments on July 30, 2018, September 4, 2018, November 2, 2018 and January 3, 2019, the Company paid to the seller in installments, prepayments of $34,678,185 (NT$1,056,297,507) in total. The estimated commission payable for the land purchase in the amount of NT$42,251,900 (approximately $1,346,889 and 1,302,062 as of December 31, 2025, and 2024, respectively) was recorded to the cost of land. The company is also under the discussion of extending the commission payable to December 31, 2023. According to the amended Land Purchase Contract dated on November 10, 2020, the transaction may be terminated at any time by both the buyer and the seller and agreed by all parties if the Company is unable to obtain the qualified satellite license issued by Taiwan authority before July 31, 2021. As of December 31, 2025, the title of the land has not transfer to the Company as the qualified license applications are still in progress from Taiwan National Communications Commission (“NCC”). As of the date of the issuance of these consolidated financial statements, the Company is in the stage of applying for approval of its operation plan and network plan with NCC before proceeding to final stage of network installation, public telecommunications reporting, and obtaining the frequency usage certificate.

On November 15, 2022, the Company entered into two real estate sale contracts (the “Land Purchase Contracts 2”) with Hsu Rong-Tang (the “Seller 2”) with respect to the acquisition by Aircom Telecom of a parcel of land and property located in Taiwan. The land is expected to be used for Aerkomm’s future projects. As of December 31, 2025, the Company paid to the Seller 2 installments refundable prepayments of NT$145,800,000 (approximately $4,647,753 as of December 31, 2025) in total.

On January 4, 2025, the Company lost control of and access to the ground station equipment located in Hong Kong. Accordingly, the Company derecognized the fully depreciated related equipment of approximately $1.9 million as of December 31, 2025.

Depreciation expense was $580,661 and $495,671 for the years ended December 31, 2025 and 2024, respectively.