Leases

3 Months Ended

Mar. 31, 2026

Note 10 – 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 utilizes 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, 2026, 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, 2026
Assets
ROU assets – operating lease	Other assets	$	1,976,210
Total ROU assets		$	1,976,210

Liabilities
Current operating lease liability	Current liabilities	$	271,793
Long-term operating lease liability	Other liabilities		1,810,504
Total lease liabilities		$	2,082,297

Future minimum lease payments as of March 31, 2026 were as follows:


2026	$	372,569
2027		495,131
2028		384,223
2029		394,384
2030 and beyond		1,476,491
Total future minimum lease payments		3,122,799
Less: Interest		(1,040,502	)
Total operating lease liabilities	$	2,082,297

For the three months ended March 31, 2026 and 2025, the weighted average remaining lease term for operating leases was 82 months and 93 months, respectively. For the three months ended March 31, 2026 and 2025, the weighted average discount rate for operating leases was 12.4 % and 12.2%, respectively. The Company paid approximately $0.1 million and $0.1 million in cash for operating lease amounts included in the measurement of lease liabilities for the three months ended March 31, 2026 and 2025, respectively. The Company did not have any finance leases as of March 31, 2026.