Leases

3 Months Ended

Mar. 31, 2025

Note 9 – Leases

The Company has various operating lease agreements in place for its office and joint ventures. Per FASB’s ASU 2016-02, Leases Topic 842 (“ASU 2016-02”), effective January 1, 2019, the Company is required to report a right-of-use asset and corresponding liability to report the present value of the total lease payments, with appropriate interest calculation. The Company utilitizes the incremental borrowing rate for each lease by developing a synthetic credit rating for the Company as of the commencement date of each lease, adjusting the synthetic credit rating to reflect the collateralized nature of the incremental borrowing rate, the Company’s borrowing rate under other debt facilities, and the market spread between secured and unsecured borrowings, and based on the adjusted synthetic rating and the various terms of the leases, selected the incremental borrowing rate based on the commencement date, duration of the lease, and a corresponding weight-adjusted corporate yield curve. Lease renewal options included in any lease are considered in the lease term if it is reasonably certain the Company will exercise the option to renew. The Company’s operating lease agreements do not contain any material restrictive covenants.

As of March 31, 2025, the Company’s lease components included in the consolidated balance sheet were as follows:

Schedule of Lease Components

Lease component	Balance sheet classification	March 31, 2025
Assets
ROU assets – operating lease	Other assets	$	2,222,706
Total ROU assets		$	2,222,706

Liabilities
Current operating lease liability	Current liabilities	$	247,750
Long-term operating lease liability	Other liabilities		2,124,736
Total lease liabilities		$	2,372,486

Future minimum lease payments as of March 31, 2025 were as follows:


2025		381,109
2026		518,972
2027		489,807
2028		379,172
2029 and beyond		1,950,150
Total future minimum lease payments	$	3,719,210
Less: Interest		(1,346,724	)
Total operating lease liabilities	$	2,372,486

For the three months ended March 31, 2025, the weighted average remaining lease term for operating leases was 93 months. For the three months ended March 31, 2025, the weighted average discount rate for operating leases was 12.2%. The Company paid approximately $0.1 million in cash for operating lease amounts included in the measurement of lease liabilities for the three months ended March 31, 2025. The Company did not have any finance leases as of March 31, 2025.

For the three months ended March 31, 2025, and 2024, the Company recognized a gain on lease termination of $0 and $94,551, respectively, related to the termination of the lease associated with the Tampa Project.