AI Financial Corp Leases Disclosure
Note 7: Leases
In connection with its acquisition of ALT5 Subsidiary (see Note 3), the Company leases commercial office space. These assets and properties are leased under noncancelable agreements that expire at various future dates. The agreements, which have been classified as operating leases, provide for minimum rent and require the Company to pay all insurance, taxes, and other maintenance costs. As a result, the Company recognizes assets and liabilities for leases with lease terms greater than 12 months. The amounts recognized reflect the present value of remaining lease payments for all leases. The discount rate used is an estimate of the Company’s blended incremental borrowing rate based on information available associated with each subsidiary’s debt outstanding at lease commencement. In considering the lease asset value, the Company considers fixed and variable payment terms, prepayments and options to extend, terminate or purchase. Renewal, termination, or purchase options affect the lease term used for determining lease asset value only if the option is reasonably certain to be exercised.
The following table details the Company’s right of use assets and lease liabilities as of December 27, 2025 and December 28, 2024 (in $000’s):
December 27, 2025 | December 28, 2024 | |||||||
| Right of use asset - operating leases | $ | 102 | $ | 121 | ||||
| Lease liabilities: | ||||||||
| Current - operating | 5 | 9 | ||||||
| Long term - operating | 107 | 113 | ||||||
ALT5 SIGMA CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of December 27, 2025, the weighted average remaining lease term for operating leases is 3.9 years. The Company’s weighted average discount rate for operating leases is 12.8%. Total cash payments for operating leases for the years ended December 27, 2025 and December 28, 2024 were approximately $27,000 and $0, respectively. Additionally, the Company recognized approximately no right of use assets and liabilities upon commencement of operating leases during the fiscal year ended December 27, 2025.
Total present value of future lease payments of operating leases as of December 27, 2025 (in $000’s):
| Twelve months ended: | ||||
| 2026 | $ | 34 | ||
| 2027 | 36 | |||
| 2028 | 37 | |||
| 2029 | 36 | |||
| Total | 143 | |||
| Less implied interest | (31 | ) | ||
| Present value of payments | $ | 112 | ||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Apr 13, 2026 | Showing above |
| 2024 | Mar 28, 2025 | |
| 2022 | Apr 17, 2023 | |
| 2021 | Mar 30, 2021 | |
| 2019 | Apr 6, 2020 | |
| 2016 | Apr 4, 2016 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.