Beeline Holdings, Inc. Leases Disclosure
17. LEASE OBLIGATIONS
Beeline Financial leases office space under various operating lease agreements, including an office for its headquarters, for branch location and licensing purposes under non-cancelable lease arrangements that provide for payments on a graduated basis with various expiration dates. Terms of these leases include, in some instances, scheduled rent increases, renewals, purchase options and maintenance costs, and vary by lease. Beeline Financial has leased approximately 9,809 square feet of space in Rhode Island and Australia that expires at various dates through 2028. The Company does not have any financing leases.
As the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate of 10% 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. Leases with an initial term of 12 months or less (“short-term leases”) are not recorded on the balance sheet and are recognized on a straight-line basis over the lease term. As of December 31, 2025, the amount of right-of-use assets and lease liabilities were $0.4 million and $0.5 million, respectively. As of December 31, 2024, the amount of right-of-use assets and lease liabilities were $1.3 million and $1.5 million, respectively.
During the year ended December 31, 2025, the Company reassessed the lease term for its office headquarters and determined that the Company will not exercise the renewal option. This change in judgment resulted in a reduction of the lease term for the affected leases. As a result of the remeasurement, the Company reduced the right-of-use assets and lease liabilities by $0.5 million and $0.6 million, respectively.
Lease expense for operating leases is recognized on a straight-line basis over the lease term. Aggregate lease expense for the years ended December 31, 2025 and 2024 was $0.2 million and $0.3 million, respectively, and is included in general and administrative expenses in the consolidated statements of operations.
Maturities of lease liabilities as of December 31, 2025 were as follows:
| (Dollars in thousands) | Operating Leases | Weighted-Average Remaining Term in Years | ||||||
| 2026 | $ | 286 | ||||||
| 2027 | 183 | |||||||
| 2028 | 37 | |||||||
| Total lease payments | 506 | |||||||
| Less imputed interest (based on 10.0% weighted-average discount rate) | (46 | ) | ||||||
| Present value of lease liability | 460 | 1.66 | ||||||
| Less current portion | 239 | |||||||
| Lease liabilities, net of current portion | $ | 221 | ||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Apr 15, 2025 | |
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.