NOTE 7 - Property and Equipment, Net

As of March 31, 2026 and December 31, 2025, the balances of property and equipment were as follows:

On July 10, 2018, the Company entered into a real estate sale contract (the “Land Purchase Contract”) with Tsai Ming-Yin (the “Seller”) with respect to the acquisition 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 $1,318,312 and $1,346,889 as of March 31, 2026 and December 31, 2025, 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 March 31, 2026, 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 unaudited condensed 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 March 31, 2026, the Company paid to the Seller 2 installments refundable prepayments of NT$145,800,000 (approximately $4,549,142 as of March 31, 2026) 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.

During the first quarter of 2026, approximately $3.7 million construction in progress associated with ground station equipment was placed in service and reclassified to ground station equipment.

Depreciation expense was $291,875 and $133,974 for the three months ended March 31, 2026 and 2025, respectively.