NOTE 12 – OPERATING LEASE RIGHT OF USE ASSETS AND LIABILITIES

Under ASU No. 2016-02, Leases (Topic 842), lessees are required to recognize all leases (with the exception of short-term leases) on the balance sheet as a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The standard was adopted using a modified retrospective approach.

The Company (through its subsidiaries and affiliates) has entered into operating leases, the Company also has several financing lease agreements. As the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate based on information available at commencement to determine the present value of the lease payments. Right-of-use assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease term is typically assessed at 5 years.

The lease cost for the three months ended June 30, 2025, and 2024, was $912,357 and $823,264, respectively.

The lease cost for the six months ended June 30, 2025, and 2024, was $1,839,612 and $1,674,651, respectively.

As of June 30, 2025, and December 31, 2024, the right-of-use assets were $6,719,981 and $7,643,504, respectively, and there was also a current lease liability of $2,428,729 and $2,378,896, respectively, and a non-current lease liability of $4,266,105 and $5,193,847, respectively.

Maturities of lease liabilities as of June 30, 2025, were as follows: