Actinium Pharmaceuticals, Inc. Leases Disclosure

Note 4 - Leases

 

The Company determines if an arrangement is a lease at inception. This determination generally depends on whether the arrangement conveys to the Company the right to control the use of a fixed asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all of the economic benefits from using the underlying asset. The Company has lease agreements which include lease and non-lease components, which the Company has elected to account for as a single lease component for all classes of underlying assets. Lease expense for variable lease components are recognized when the obligation is probable. The Company made an accounting policy election to exclude from balance sheet reporting those leases with initial terms of 12 months or less.

 

Right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As an implicit interest rate was not readily determinable in the Company’s leases, the incremental borrowing rate was used based on the information available at commencement date in determining the present value of lease payments.

 

The lease term for all of the Company’s leases includes the non-cancellable period of the lease plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor. Options for lease renewals have been excluded from the lease term (and lease liability) for the Company’s leases as the reasonably certain threshold is not met.

As of December 31, 2025, the Company has three leases which have been capitalized in accordance with ASC 842, one for corporate office space, one for manufacturing space and one for office equipment. The Company entered into a lease for corporate office space effective June 1, 2022. The lease has a term of 5 years and 2 months, with an expiration date on July 30, 2027 and current annual rent of $0.6 million. The Company is also responsible for certain other costs, such as insurance, utilities and maintenance. As noted above, the Company entered into a lease for manufacturing space effective December 1, 2025. The lease has a term of five years and one month, with an expiration date of December 31, 2030 and current annual rent of $0.2 million. The Company is also responsible for certain other costs, such as insurance, utilities and maintenance.

 

The components of lease expense are as follows:

 

(in thousands)		Year ended December 31, 2025				Year ended December 31, 2024
Operating lease expense		$	707			$	691
Finance lease cost
Amortization of right-to-use assets		$	10			$	10
Interest on lease liabilities		$	1			$	2
Total finance lease cost			11			$	12

 

Supplemental cash flow information related to leases are as follows:

 

		Year ended
(in thousands)		December 31, 2025				December 31, 2024
Cash flow information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flow use from operating leases		$	645			$	618
Operating cash flow use from finance leases		$	11			$	11
Financing cash flow use from finance leases		$	10			$	9
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations:
Operating leases		$	707			$	-
Finance leases		$	-			$	-

 

Weighted average remaining lease terms are as follows at December 31, 2025:

 

Weighted average remaining lease term:
Operating leases			2.9 years
Finance leases			1.0 years

 

As the interest rate implicit in the leases was not readily determinable at the time that the leases were evaluated, the Company used its incremental borrowing rate based on the information available in determining the present value of lease payments. The Company’s incremental borrowing rate was based on the term of the lease, the economic environment of the lease and reflect the rate the Company would have had to pay to borrow on a secured basis. Below is information on the weighted average discount rates used at the time that the leases were evaluated:

 

Weighted average discount rates:
Operating leases			6.0	%
Finance leases			6.2	%

Maturities of lease liabilities are as follows:

 

Year ending December 31,		Operating  Leases				Finance  Leases
2026			814				11
2027			557				-
2028			182				-
2029			187				-
2030			193				-
Total lease payments		$	1,933			$	11
Less imputed interest			(250	)			(-	)
Present value of lease liabilities		$	1,683			$	11