Note 6 – Leases (Company as Lessor)

The Company leases marine equipment to a related party in an operating lease arrangement. The lease commenced on January 1, 2023 and ends December 31, 2025. The agreement provides for fixed minimum monthly lease payments of $4,000 for the term of the agreement. At the end of the term any additional lease payment due will be calculated and paid. The lessee’s right to use the marine equipment is limited to periods when the equipment is not in use by the Company. There is no option to purchase the equipment as part of the agreement, and the Company expects to recoup the full value of the equipment upon its eventual sale. The Company manages risk by requiring the lessee to indemnify the Company in the event of loss to property or persons.

Lease income was $36,000 and $32,000 for the nine months ended September 30, 2024 and 2023. Lease income is included in revenue on the Consolidated Statements of Operations. Future lease payments expected to be received under this related-party lease are as follows: